Hawks, Doves and the Chairman: Fed Policy Explained

These are historically contentious times within the Fed.

As the Federal Open Market Committee begins its two-day January meeting Tuesday, its members have carved out opposing positions on everything from the economic outlook to the benefits and dangers of its unparalleled easy interest policies.

Most of all, they harbor sharply divergent views on the best ways to spur economic growth.

FOMC members make their views known in public speeches and interviews and, ultimately, in their committee votes. But, in many ways, the members talk past each other, not to each other.

This makes it difficult for the public to grasp the back and forth and some of the subtleties in the debate, even while the Fedhas taken several monumental steps towards transparency.

Since cameras aren’t allowed in the FOMC meetings, CNBC approached the problem in a unique way.

We put together a team of producers and editors to simulate a meeting with Senior Economics Reporter Steve Liesman taking on the roles of Federal Reserve Chairman Ben Bernanke, a Fed Hawk, and a Fed Dove.

A hawk refers to an economic policy advisor who is concerned primarily about inflation and its effects on society.

A dove prefers low interest rates—thereby boosting economic growth—believing that inflation and its negative effects will have minimal impact on society.

In part one of his three-part series, "Steve is the Fed", he gives his version on how the Fed sees the state of the economy.

In part two, Steve gives his version on what the Fed may do to revive the economy.

Finally, in part three he envisions what the Fed will say to the markets so investors don't panic.

Throughout the series, Liesman uses actual ideas from FOMC members and in some cases, their actual words.