Fed watchers and even some members of the central bank itself are beginning to clamor for a move away from virtually zero interest rates.

They fear an inflation inferno is boiling just below the incipient economic recovery.

The Fed slashed rates and pumped hundreds of billions of dollars into financial markets to keep them from freezing in panic over bank losses. Since then, the level of risk the banks face has become clearer, but rates have stayed very low.

It could be argued that the Fed action staved off a much wider collapse, but economists are beginning to wonder — at what future cost?

“My calculation implies we may not have as much time before the Fed has to remove excess reserves and raise the rate,” says distinguished economist John Taylor, now a Stanford University professor, speaking at a recent conference.

Taylor, a Treasury undersecretary from 2001 to 2005, made himself famous for the “Taylor Rule,” a formula for the Federal Reserve to use in determining interest rates.

That rate now is targeted at between zero and 0.25 percent. Taylor says his rule suggests a fed funds rate of 0.5 percent. He also calls the Fed’s bulging balance sheet a “systemic risk,” because it could drive inflation sharply higher.

Allan Meltzer, the economist who is known as the dean of Federal Reserve watchers, says the central bank should pull back on its massive easing program to avoid an inflation surge.

“I’m not worried about inflation tomorrow,” Meltzer tells Bloomberg TV. “I’m worried about inflation two years from now, and the way to prevent it two years from now is to start doing something now.”

The Fed should “slow the rate at which it increases money growth,” Meltzer says. “It’s the agent of the Treasury now.”

Signs of future inflation are rampant, he says.

“Mortgage rates are starting to move up, bond rates are starting to move up,” Meltzer points out.

“People are nervous. The dollar is declining. The money growth rate is too high. It takes a couple of years to slow it down.”

Meltzer doesn’t want the Fed to completely halt its easing campaign. “I just want them to look ahead a little bit.”

He says the current situation reminds him of the 1970s. “The people in the ’70s weren’t stupid,” Meltzer points out. “They knew that they were creating inflation. But they worried about unemployment. … That’s how we got the big inflation.”

Meltzer isn’t alone in worrying about inflation.

“A country that continuously expands its debt… and raises much of the money abroad to finance that, at some point, it’s going to inflate its way out of the burden,” investment icon Warren Buffett recently warned on CNBC.

Philadelphia Federal Reserve President Charles Plosser, one of the Fed's biggest inflation hawks, said this week that the central bank needs to get out ahead of a potential inflation spike as the economy recovers, even if the jobless rate is still rising at the time.

"Unemployment is a lagging economic indicator. The economy is going to turn around long before unemployment rates peak," Plosser told reporters after a speech at the University of Chicago.

"There will come a time when we have to start raising rates and draining all this liquidity, and there are some parts of the marketplace ... that may not be fully recovered yet. We will need to do that."

In the past, and in the 1970s in particular, the Fed has sometimes been too slow to start tightening its policy after an economic downturn, Plosser said.

"Once that process (of recovery) starts we need to get out in front of it, otherwise we could be faced with lots of inflation down the road."

Even Ben Bernanke, the current Fed chief, recognizes the risk ahead.

Bernanke recently defended the Fed’s management of the economy, and said the monetary authority would make sure that the dollar stayed strong.

"I think the issue at hand is whether or not the dollar will retain its value, and I think it will. I think the dollar will be strong. I think it will be strong because the U.S. economy is strong. And it will also be strong because the Federal Reserve is committed to assuring that we have price stability," he said at a conference last week, Reuters reported.

"We are currently, of course, being very aggressive because we are trying to avoid another form of price instability, which is deflation and weakening prices and economic growth.

"But we are also committed to removing accommodation in a timely way to ensure that as we come out of this episode and we move back to sustainable recovery, we will have price stability," Bernanke said.