US dollar decline accelerates as Waller takes a dovish turn

The latest comment from the Fed’s Waller is:

• Good arguments that if inflation continues falling for several more months that you could lower policy rate

Waller is generally a hawk so this is a real turn from him and the first hint from any Fed official that rate cuts are coming, or could come.

The market is already pricing in a 75% chance of a May rate cut but that certainly hasn’t been endorsed by the Fed, until now. As a result, we’re seeing material US dollar selling along with bids in bonds and buying in equities.