shorter dated treasury yields rose while longer dated maturities slipped early wednesday flattening the yield curve slightly ahead of a hotly anticipated may consumer price index reading inflation readings are front and center for financial markets as investors assess the federal reserve’s policy path and its ability to bring price pressures under control without triggering a sharp economic downturn the may consumer price index is due at 830 am et april data showed the yearly cpi inflation rate fell for the first time in eight months to 83 the prior 85 reading in march was the biggest since december of 1981 see us didn’t get any relief from high inflation in may – cpi to show another big gain the fed which also began shrinking its balance sheet this month raised the fedfunds rate by 25 basis points or a quarter of a percentage point in march followed by a halfpoint rise in may fed chair jerome powell has said halfpoint hikes are on the table this month and in july while investors have increasingly focused on the central bank’s september meeting the european central bank on thursday signaled it will also begin tightening monetary policy announcing it would end its quantitative easing program on july 1 and deliver a quarterpoint rate increase next month the ecb said it would lift rates by a halfpoint in september if inflation expectations remain the same or deteriorate see also ecb could hike 50 basis points in september says central bank’s holzmann in first comments after meeting report “today the focus shifts to the us inflation release which is expected to report just a minor reduction in yearoveryear momentum given another strong monthly increase this does not bode well for the upcoming fomc meeting at which we expect another increase in the median dots” wrote economists at unicredit bank referring to the socalled dot plot that tracks rate forecasts from individual fed policy makers “as things stand now there are three trends that appear well established in the us and the euro area 1 curves are likely to bearflatten for the time being 2 marketbased inflation expectations are not edging substantially higher despite realized inflation readings still surprising on the upside the rationale is mainly the hawkish commitment of central banks to fighting inflation at any cost 3 real rates are edging higher on the back of inflationcommitted central banks which implicitly suggests that they are targeting higher real rates” they wrote