Federal Reserve Governor Christopher Waller has signaled that a hotter-than-expected inflation reading this week could prompt the central bank to raise interest rates sooner than markets currently anticipate.
The comment marks a notable shift in tone from a policymaker who has previously been viewed as more dovish, adding fresh uncertainty to the rate path heading into the July FOMC meeting.
The warning comes as investors brace for the release of US consumer price inflation figures on Wednesday.
Wall Street consensus estimates are closely watched, with any upside surprise likely to trigger immediate repricing in the Treasury market.
The 2-year yield, which is highly sensitive to near-term policy expectations, is expected to react sharply to the data print and any subsequent commentary from Fed officials.
Global markets are entering a high-stakes week defined by the convergence of critical macroeconomic data and the commencement of the Wall Street earnings season.