St. Louis Federal Reserve President James Bullard said on Friday it is difficult to communicate the Fed's likely monetary policy direction clearly to markets with benchmark interest rates near zero.

He suggested in a presentation at a Swiss National Bank conference in Zurich that policymakers settle on some type of rule for explaining how the U.S. central bank's purchases of long-term securities should be adjusted in response to changing economic conditions.

Quantitative rules are generally not as satisfactory as interest rate rules, Bullard said. But it is still worthwhile to use them because of the need to communicate future monetary policy to markets.

The Fed has resorted to buying assets and other forms of pumping liquidity into the markets, or so-called quantitative easing, as it exhausted its ability to cut borrowing costs to stimulate the economy.

A copy of his presentation was made available in Washington.

The Fed cut rates to near zero in December to help the economy weather a wrenching financial crisis. To continue to lower borrowing costs, policymakers began buying hundreds of billions of dollars worth of longer-term Treasury and mortgage-related securities.

The Fed this week renewed its promise to hold rates exceptionally low for an extended period. But it announced a step toward tapering off asset purchases as the economy appears be turning up after a severe downturn.