A rate cut from the Federal Reserve "may be warranted soon" to help get inflation back to 2% and to guard against the risks of elevated trade uncertainty, St. Louis Fed President James Bullard said June 3.

Bullard declined to say when that rate cut should take place or how large of a rate cut he would favor, telling reporters that he would not want to "pre-judge" those decisions.

But the Fed official said the "narrative on global trade has darkened," and it now looks more likely that tariff negotiations will extend further out into the future.

"It's the … global trade regime uncertainty factor that I think is adding impetus to the case for a rate cut," he told reporters after a speech in Chicago, noting that there was "already a case for a rate cut" given that inflation and inflation expectations are below the Fed's 2% goal.

Bullard spoke days after President Donald Trump announced a planned 5% tariff on all Mexican imports, a development that prompted several economists to begin projecting a rate cut from the Fed. The central bank has kept its benchmark federal funds rate unchanged this year, pausing its previous campaign of gradually hiking interest rates and saying it would be "patient" as it monitors incoming economic data. Bullard is a voter this year on the rate-setting Federal Open Market Committee, which will meet again on June 18 and 19.

While the central bank cannot react to day-to-day trade headlines, an environment of greater uncertainty may dent global growth and spill over into the U.S. economy, Bullard said.

A rate cut could "provide some insurance in case of a sharper-than-expected slowdown," and it could also help get inflation and inflation expectations back to the Fed's 2% target, Bullard said.

The Fed's favored gauge, the personal consumption expenditure price index excluding food and energy, grew by 1.6% year over year in April. Fed Chairman Jerome Powell and other Fed officials have said the recent dip in inflation is likely due to "transient" factors.

But Bullard noted that inflation is below the Fed's target despite "more than two years of upside surprise in the U.S. real economy," which got a boost from fiscal stimulus during that time.

"This is clearly concerning for the credibility of the inflation target," Bullard said of the inflation misses.

He also highlighted the recent inversion of some portions of the Treasury yield curve, saying that the decrease in 10-year Treasury yields may suggest that financial markets "expect less growth and less inflation going forward than the FOMC does." That, he added, may be "a signal that the policy rate setting may be too restrictive for the current environment."

Fed officials are gathering at a conference at the Chicago Fed on June 4 and 5 that will partly focus on inflation's performance since the Great Recession. That includes whether policymakers should consider alternative ways of reaching their 2% target, such as policies calling on the Fed to keep rates "lower for longer" and explicitly encourage an overshoot of the 2% goal to make up for past misses on the downside.