According to Odaily, the question of whether the Federal Reserve has gone too far in its fight against inflation, potentially leading the world's largest economy into a destructive recession, has unsettled global markets. More turbulence is expected before a clear answer emerges.
Former New York Fed President Bill Dudley recently shifted from a hawkish to a dovish stance, advocating for immediate rate cuts to avoid a recession. Evidence of a weakening job market and slowing inflation has rapidly accumulated since his change in position, suggesting that the Fed may be lagging behind the economic situation.
Dudley believes that an immediate rate cut is a measured response, though it remains unlikely. This view contrasts with Fed Chair Jerome Powell's cautious approach, as the Fed rarely makes such moves outside of regular policy meetings. Attention now turns to the next meeting in September, where the Fed might cut rates by 25 or 50 basis points, depending on economic data available at that time. Beyond that, the path remains uncertain.