U.S. crude futures have fallen nearly 17 percent this year and briefly dipped below $30 a barrel earlier this week. Bullard also said it could take longer than expected for the oil market to stabilize, but added that low prices are a "net positive" for the economy.
"Once oil prices stabilize, headline inflation should return to the Federal Open Market Committee's inflation target of 2 percent, although it may take longer than previously thought," he said.
WTI in 2016
He also said U.S. inflation expectations are falling, and that is worrisome. "Low inflation expectations may keep actual inflation lower, all else equal, making it more difficult for the Fed to return inflation to target."
Bullard is the third Fed voting official that has spoken this week. On Tuesday, Fed Vice Chairman Stanley Fischer said the U.S. unemployment rate is nearing its natural rate and that the central bank is still conducting expansionary monetary policy.
Boston Fed President Eric Rosengren said Wednesday that U.S. and global economic growth may be diverging and could force the Fed into a more gradual pace of normalization.
William Dudley, the New York Fed President, is scheduled to speak Friday.
— Reuters contributed to this report.