In a large saucepan, over medium heat, melt the butter. Add the pepper and shallot and cook for about 3 minutes. Whisk in the flour, and cook for an additional minute or until the flour is golden.
Whisk in the milk in a steady stream. Continue cooking for an additional 5 minutes until thickened.
Reduce the heat to low, and add the cheddar and Monterey jack cheeses in small increments until melted and all of the cheese has been added.
Whisk in the cream cheese until smooth. Season with the turmeric and a dash of salt and black pepper. Leave the queso over low heat, stirring occasionally until you are ready to serve. Alternatively, you can store the queso in the refrigerator for about 3 days and reheat when you are ready to serve.