WASHINGTON (Reuters) - The Federal Reserve should start reducing its $120 billion in monthly bond purchases this fall and cut them "fairly rapidly" so the program ends in the first months of 2022 and paves the way for a rate increase that year if needed, St. Louis Federal Reserve president James Bullard said on Friday.

Inflation has come in faster than expected Bullard said in webcast remarks to a European economics institute, and the Fed is not currently well poised to react if needed with higher interest rates.

The Fed has said it wants to end the bond purchases before raising rates, and Bullard said the time was right to clear the way in case a rate increase is needed sooner than later.

"This is all about moving the supertanker and nudging the supertanker in the right direction at the right time," he said.

Bullard said job markets will likely have met the Fed's benchmark for a rate increase sometime next year, while the current year's high inflation offsets some of the prior weak inflation readings.

“This is a big inflationary impulse. We have to have the right risk management to contain this if we need to in 2022," Bullard said.

If inflation eases on its own, as many policymakers expect, "we have a beautiful response. Just stay at near zero policy and push out the date of liftoff. The risk management to my mind is very clear,” he said.

The Fed is currently debating when to begin to taper, or reduce, its asset purchases, with many market analysts expecting the process to start late this year or early in 2022.

(Reporting by Howard Schneider; Editing by Andrea Ricci)