Former New York Fed President Bill Dudley: The Fed's turmoil has just begun

The unsettling question of whether the Fed has gone too far in its fight against inflation, leading the world's largest economy into a destructive recession, has shaken the long-standing calm in global markets. Until the answer comes, more turbulence is expected. Former New York Fed President Bill Dudley said he switched from hawk to dovish two weeks ago, no longer supporting rate hikes, but advocating an immediate rate cut to avoid a recession. It turns out that the timing is not too early. Since then, evidence of a weakening job market and slowing inflation has accumulated rapidly, strongly suggesting that the Fed has fallen behind the curve. He believes that an immediate rate cut is in order, but unlikely. This is inconsistent with Powell's cautious attitude, and the Fed rarely takes such moves outside of regular policy-making meetings. So the focus turns to the next meeting in September, where the Fed may cut interest rates by 25 basis points or 50 basis points, depending on economic data between now and then. But after that, the road is unclear. (Jinshi)