UPDATE 1-Fed's Bullard-deflation risks easing

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WASHINGTON, June 15 (Reuters) - Risks of a dangerous U.S. deflationary spiral are easing and the economy is on track for growth in the second half of the year, St. Louis Federal Reserve James Bullard said on Monday.

"There's a lot of signs financial stress is abating here," Bullard said in an interview with CNBC.

He did not answer directly a question on whether higher long-term interest rates might influence the Fed's plans to buy longer-term securities, but said fears of a damaging deflationary spiral have receded.

"The risk coming out of September-October was that we get into this deflationary psychology," he said. "I think that's abating some."

Higher long-term Treasury security interest rates indicate both inflation concerns and greater appetite for riskier assets, he said.

"We've got some expected inflation component in there but you've also got some improvements in the real economy in there," he said. (Reporting by Mark Felsenthal; Editing by Leslie Adler)