Bond yields fell as investors awaited the inflation data.
Some analysts have warned that the market may be too optimistic about the likely pace of Fed rate cuts given that reducing inflation further may prove harder.
“Importantly, absent improvements on the supply side, the outlook for continued disinflation to 2% is likely to get trickier from here–the so-called ‘last mile’ challenge,” said Mohamed El-Erian, adviser to Allianz and Gramercy, in a post on X.