USD weakens as Fed's Waller, Bowman vindicated on labor market calls

USD has softened across major pairs following recognition that Federal Reserve governors Waller and Bowman's early rate cut advocacy was based on accurate labor market analysis rather than political motivations. Both Trump-appointed governors began calling for monetary easing before their colleagues, correctly anticipating weakness in employment data that has since materialized. Waller's particularly prescient forecasts about labor market deterioration have proven accurate, supporting the Fed's recent dovish pivot. Markets are reassessing the Fed's policy trajectory, with rate cut expectations firming for upcoming meetings. The dollar index has retreated from recent highs as traders price in a more accommodative Fed stance. This development suggests future Fed decisions will remain data-dependent rather than politically influenced, potentially leading to continued USD weakness if labor market softness persists. Technical indicators show USD losing momentum against major currencies.