This is interesting. Richmond Fed President, Jeffrey Lacker, is out today with comments suggesting it might be time for the Fed to start pulling back a bit.

From Reuters:

The U.S. economy appears to have stabilized and may not need all the stimulus the central bank had planned to offer, Richmond Federal Reserve Bank President Jeffrey Lacker said on Thursday.

“The economy appears to have leveled out and I believe we can look forward to better times ahead,” Lacker told a business group.

Even as he cautioned that “conditions remain distressed in many industries and localities,” Lacker, a voting member of the U.S. Federal Reserve’s policy-setting panel this year, said the central bank would have to calibrate its purchases of long-term securities carefully to avoid providing too much economic stimulus.

Lacker said the Fed’s commitment to buy up to $200 billion in debt of government-sponsored mortgage agencies and up to $1.25 trillion in mortgage-backed securities issued by those agencies has supplied reserves to banks that reduce their need to borrow from the Fed. At a certain point, the banking system would no longer need to borrow to obtain the desired level of reserve balances, he said.

“I will be carefully evaluating whether we need or want the additional stimulus that purchasing the full amount … would provide,” he added.

Lacker’s remarks suggest pressure is already building within the Fed to pull back some of its unusual measures to boost the economy as signs of recovery mount.

Wasn’t it just a couple of months ago, maybe less, when Krugman and others were lobbying hard for a second stimulus? Look for this one to stir up a hornets nest. Shades of 1936 when the government pulled back on stimulus and instituted a couple of other programs that caused the economy to crash again are sure to be invoked. It could also mean some rough sledding for the debt markets.

So is Lacker a loose cannon or Bernanke’s designated trial balloon floater? My guess is that he’s probably a bit more of the former but has the ear of a faction within the Fed. This might well mean that we’re a lot closer to the end of Fed intervention than the beginning.