US Treasury Yields Drop Ahead of Key Inflation Report, Market Braces for CPI Impact

US Treasury yields declined Tuesday as investors await June's CPI data, widely expected to reflect the inflationary effects of Trump-era tariffs. Eastspring Investments warns a tariff-driven inflation spike could trigger a bond market selloff, while subdued figures might embolden policymakers to treat tariffs as fiscal leverage.

Bank of America's Mark Cabana notes September rate cut odds have slipped to 65%, with hotter inflation potentially forcing a market reassessment. CreditSights' Zachary Griffiths emphasizes the CPI release will shape Fed policy trajectory and risk appetite through year-end.

Brandywine's Tracy Chen joins consensus expecting visible tariff war impacts in the data. The WHITE House's economic team remains under scrutiny as the report could redefine fiscal and monetary policy crossroads.