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June 24 (Reuters) - As Federal Reserve policymakers begin an intense debate over when and how to start reducing the central bank's support for the economy, they are split over what poses the bigger risk: a still-large jobs deficit or a potential inflation shock.

Robert Kaplan and James Bullard, chiefs respectively of the Dallas and St. Louis Fed banks, on Thursday both warned that inflation could stay higher for longer than many of their colleagues may anticipate.

"Policymakers will have to take this new risk into account in the months and quarters ahead," Bullard told the Clayton Chamber of Commerce near St. Louis.

Kaplan, speaking to the Headliners Club of Austin, said he sees "upside risk" to his projection for 2.4% or 2.5% inflation next year, already at the top of the range of Fed forecasts. He added that the Fed should start trimming its asset purchases "sooner than later" to gently begin the process of reducing stimulus and avoid having to slam on the brakes sharply later on. Continuing asset purchases longer than necessary could also fuel excesses and imbalances in financial markets, Kaplan said.

Both believe the Fed will need to start raising interest rates from current rock-bottom levels next year.

Meanwhile, New York Fed President John Williams and Philadelphia Fed President Patrick Harker, speaking at separate events, emphasized how much farther the labor market has to go before it heals.

"Once the recovery is more complete and the economy is in a very good place, then we can take back the low interest rates and get them back to more normal levels," Williams said during a virtual conversation hosted by the College of Staten Island. "It's not the time now because the economy is still far from maximum employment."

Harker, speaking at a virtual event held by the Official Monetary and Financial Institutions Forum, said the economy is now down around 10.6 million jobs compared with what there would have been had jobs growth maintained its pre-pandemic trajectory.

Neither Harker or Williams said when they believe the Fed will need to start raising rates, though a majority at the central bank do believe they'll need to start increasing rates in 2023.

Since the pandemic began last year, the Fed has faced little tension between its two mandates of full employment and stable prices. Near-zero interest rates and $120 billion in monthly asset purchases were calibrated to do double duty, pushing up on hiring and what had been too-low inflation by driving down borrowing costs.

But now, with the economy reopening at a fast clip and businesses struggling to meet demand, consumer prices rose 5% last month, the fastest since 2008.

Fed Chair Jerome Powell has argued that the rise will prove temporary, with inflation cooling as reopening schools and receding infection fears bring more Americans back to the workforce and businesses ramp up production to cure supply bottlenecks.

But some policymakers have their doubts. Dallas Fed's Kaplan points to 2.5 million or more Americans over 55 who have retired since the pandemic began, and on Thursday said it's unclear how many will return to the workforce.

That, along with the 1.5 million workers who have left jobs to care for family members, means that despite the giant jobs hole the labor market may be tighter than the 5.8% unemployment rate suggests, he said.