TechFlow News: The unsettling question of whether the Federal Reserve has gone too far in fighting inflation, causing the world's largest economy to fall into a devastating recession, has shaken the long-standing calm in global markets. More turbulence is expected before the answer emerges.

Former New York Fed President Bill Dudley said he switched from hawkish 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 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-setting meetings. So the focus turns to the next meeting in September, where the Fed may cut rates by 25 basis points or 50 basis points, depending on economic data between now and then. But after that, the path is unclear.