Fed's Lacker suggests that the Fed should consider ending QE2 now that economic growth is picking up

Richmond Federal Reserve President Jeffrey Lacker thinks that the Federal Reserve should seriously reconsider its bond purchases now that the U.S. economy looks stronger. 

He also  expects the economy to expand close to 4.0% this year, lifted by robust consumer spending.

He isn't worried about inflation, but instead that the economy and money supply are overheating.  Via WSJ:

Both the Fed and private-sector economists expect the recovery, which started in June 2009, to gain momentum this year. Gross domestic product, the broadest measure of economic activity, rose at an inflation-adjusted annual rate of 3.2% in the last quarter of 2010 as consumers spent more, exports rose and companies drew down inventories. In December, Americans increased their use of credit cards for the first time since August 2008, indicating they are more confident about the economy.


Lacker said the recent decline in the savings rate suggests that many households have made substantial progress toward repairing their balance sheets following the financial crisis.

"Given these stronger fundamentals, it seems quite reasonable to project robust growth in consumer spending this year," the Fed official said.