St. Louis Federal Reserve President James Bullard said the central bank could begin tapering its balance sheet sometime this year, Reuters reported.

Speaking with reporters in Australia, Bullard reportedly said ending the Fed's reinvestment policy could be "accommodated" by markets and would cause only minor upward pressure on Treasury yields. He also said rather than selling its assets, the Fed may just let them mature.

Bullard's latest comments are similar to others he and other Fed governors recently made. Now that the federal funds rate has increased this year, Bullard said the central bank "may be in a better position to allow reinvestment to end or to otherwise reduce the size of the balance sheet."

Financial markets are pricing in at least two more interest rate hikes in 2017, Reuters reported.