U.S. Treasurys fall ahead of key June inflation data

U.S. Treasury yields fell on Tuesday ahead of key inflation figures due later on Tuesday which may offer further insights into the Federal Reserve's potential interest rate moves.

At 4:41 a.m. ET, the 10-year Treasury yield was about one basis point lower at 4.419%, and the 30-year yield was lower by more than one basis point at 4.958%. The 2-year yield was flat at 3.9%.

One basis point is 0.01%. Yields and prices have an inverse relationship.

Economists surveyed by Reuters anticipate that headline inflation for June will pick up to 2.7% on an annual basis, up from 2.4% in May. Core inflation is also projected to increase to 3.0% from 2.8%.

“If tariffs begin to show up clearly in the US June CPI data ... U.S. bond markets could sell off to reflect the higher inflation risk brought about by [U.S. President Donald] Trump's recent tariff escalation,” Eastspring Investments analysts experts wrote in a note published Tuesday.

In comparison, a softer than expected core consumer price index number will risk leading the U.S. administration to view higher tariffs as a “costless source” of revenue to pay for some of the tax cuts in the “big beautiful bill,” the consultancy added.

Investors are also eyeing developments after White House National Economic Council Director Kevin Hassett said on Sunday that the Trump administration is looking into whether it has the authority to dismiss Federal Reserve Chair Jerome Powell.

“But certainly, if there's cause, he does,” Hassett said on ABC News' “This Week.” Although Trump has publicly stated he does not intend to fire Powell, Hassett's remarks indicate the White House is still exploring the option.