(Recasts, adds quotes from Bullard)
HONG KONG, March 27 (Reuters) - A bubble could form in the U.S. economy even as the Federal Reserve unwinds its accommodative policy, a top U.S. central banker said on Thursday, adding policymakers' ability to spot them had improved substantially.
James Bullard, president of the Federal Reserve Bank of St. Louis, also told an investment conference in Hong Kong that while there was a risk of keeping rates too low for too long, he did not think the Fed was doing that.
"I don't see an immediate bubble now, but maybe one would form as we are trying to remove policy accommodation in the years ahead, because that's what happened in the 2004-2006 period," Bullard said.
The Fed has held rates near zero since late 2008 to help battle a brutal recession. It also launched massive bond-buying stimulus, which it is now tapering and which is widely expected to end late this year.
Last week, the Fed said it expected to keep interest rates near zero for a "considerable time" after the bond-buying program ends -- a period Fed Chair Janet Yellen subsequently said was probably around six months.
Markets took that as a signal U.S. rates could start rise in about a year's time, sooner than previously anticipated.
Bullard said the Fed's unconventional policies were effective, even as he nodded to the possibility they may be suboptimal and therefore contributing to unnecessary global volatility.
In response to a question, he said he did not favour raising the inflation target in the United States to 4 percent from 2 percent.
"I don't think it is a good idea," Bullard said. "Most of the models say 'just name an inflation target and proceed from there', but I don't see it as a good idea."
Bullard was speaking on a panel at the annual Credit Suisse investor conference in Hong Kong.
(Additional reporting by James Pomfret; Editing by John Mair)