Fed's Bullard plays down talk of more asset buying LONDON (Reuters) - The European debt crisis and disappointing growth in the United States and China are worrisome, but the U.S. economy is still some way from needing more asset-buying stimulus, a U.S. Federal Reserve policymaker said on Tuesday. St. Louis Federal Reserve Bank President James Bullard also told an audience in London that the Fed was not likely to extend its "twist" operation, supporting bond markets by extending the maturity profile of the debt it holds, beyond the end of the year. The Fed cut benchmark rates to near zero in December 2008 and has bought $2.3 trillion in bonds to stimulate economic growth in two quantitative easing (QE) programs. It has signaled it will hold rates near zero until at least late 2014. Recent data, however, has reinforced the view that the U.S. economy is faltering, and the most recent jobs report - which was below market consensus - raised bets for further Fed policy easing. The Fed's next policy-setting meeting is July 31-August 1. Some Fed officials have suggested risks from the euro zone crisis point to a need for further easing measures as a precaution. But Bullard, who will not be a voting member of the Fed's policy-making panel until next year, played down prospects of a third round of asset buying, or QE3. "If things slow down a lot more and the U.S. economy looked like either that it was going into recession or that deflation would develop, then I think we could consider more action, but I don't think we are there at this juncture," he said. I don't see a lot of deflation developing in the U.S. right now but I would definitely keep an eye on it. A Reuters poll on Friday showed economists at Wall Street's top bond-trading firms putting the likelihood of a third round of quantitative easing at 70 percent. <ID:L2E8I6DWM> Bullard is considered a centrist on the spectrum of Fed policymaker views that span advocates of aggressive action to boost growth to opponents of further central bank intervention. Looking broadly at the economic climate, Bullard said policymakers were coming to terms with the possibility the euro area sovereign debt crisis could be more painful and more protracted than previously believed. (The effects from the crisis are) mostly coming through U.S. financial markets and certainly show up in the U.S. equity markets. The fact that Europe is in recession means that U.S. multinationals are being affected by that - that's affecting their valuations and there's just general uncertainty that's affecting U.S. financial markets," he said. Bullard said the Fed Reserve would find it difficult to extend its "twist" operation to support bond markets in 2013. "Twist has been extended through the end of the year, but we are running out of balance sheet," Bullard told reporters at a briefing after a conference in London. There is a limited amount of short-term Treasuries that we can sell and buy long-term Treasuries. So I don't think you can look at any more extension of Twist beyond the end of the year. On June 20 the central bank expanded its "Operation Twist" by $267 billion, meaning it will sell that amount of short-term securities to buy longer-term ones to keep long-term borrowing costs down. The program, which was due to expire in June, will now run through the end of 2012. Bullard said it will take some time to see what impact the Fed's June renewal of the maturity extension program, informally called "Operation Twist," will have on the U.S. economy. Additional Reporting by Mark Felsenthal in Washington; editing by Patrick Graham, John Stonestreet