Treasury yields trim early losses but remain lower, ahead of tomorrow’s consumer price data. Markets expect inflation to slow down, potentially allowing the Fed to hike rates only once more. Economists polled by WSJ foresee the 12-month core CPI declining to 5% from May’s 5.3%.

Meanwhile, the 10-year yield is at 3.973% and the two-year at 4.864%. Volatility is to be expected, due to a combination of “increased supply, summer weeks, economic evolution, balance sheet runoff, and the Fed searching for their resting spot,” AmeriVet’s Gregory Faranello says in a report. Some investors, however, still believe more tightening is needed to cool the economy, WSJ reports.

By: Paulo Trevisani (paulo.trevisani@wsj.com)