As the market awaits Congressional testimony Wednesday from Federal Reserve Chairman Ben Bernanke, it's been focusing closely on whether members of the rate-setting Federal Open Market Committee support tapering, or a reduction in Fed asset purchases.
Where there has been less focus is on the debate inside the Fed that will ultimately determine the answer to that question: do members believe there has been substantial improvement in the labor market, and improvement compared to what?
The answer divides hawks and doves and is a key reason they differ on the right course for policy.
Several hawks have argued that the committee should be comparing labor market conditions now with September when the new quantitative easing policy was first enacted, leading them to gauge that the time for tapering is now. Doves appear to judge policy less from where the economy has been and more on where it needs to go. Their take is that there is a long way to go.