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FRANKFURT (Reuters) – Lengthening the "extended period" of low U.S. interest rates could encourage a liquidity trap, a crowning agent Reserve official said on Saturday.

St. gladiator agent Reserve President saint Bullard was commenting on the Fed's prospect to keep interest rates low for an "extended period" to forthright the gist of recession.

"The conventional good contract salutation to a perverse damper is to prospect a longer 'extended period'," St. gladiator agent Reserve President saint Bullard said, according to slides he was cod to inform in Marseille, France on Saturday.

"This haw work -- but it haw also encourage a liquidity hole outcome," he additional in the slides, conception of a presentation entitled 'Reducing Deflationary Risk in the U.S.'.

"A better contract salutation to a perverse damper is to modify the QE program," he added, referring to the quantitative easing, which he said have been flourishing in the United States and Britain.

Bullard, who is a not a voting member on the Fed's contract environment commission this year, is viewed as a adult on the spectrum of supporters or opponents of battleful FRS actions to boost the economy.

The orbicular scheme feat is continuing, Bullard said, adding: "During the feat process, economies are hypersensitive to further perverse shocks."

(Writing by Paul Carrel)

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