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Treasury yields climbed Tuesday as market expectations for additional Federal Reserve interest rate increases grew, with investors repositioning before a June inflation report that will offer a fresh read on whether further tightening is still needed.
Markets price in more Fed action Yields moved higher as traders assigned greater probability to another rate increase from the Fed. Treasury yields and rate-hike expectations tend to move together.
When investors believe borrowing costs will keep rising, they require more return to hold government debt. That relationship pushed yields up Tuesday.
The June inflation print is now the data point driving market positioning.
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