us treasury yields ticked higher on monday with the policysensitive twoyear rate notching an almost 15year high a day ahead of an eagerly awaited reading on august inflation yields on us government bonds initially pulled back but then moved higher ahead of crucial consumer price data on tuesday thats seen as likely to confirm another aggressive rate hike by the federal reserve is likely when policy makers meet next week the annual headline rate of the consumerprice index is off its peak but the july reading of 85 yearoveryear was still near a 41year high meanwhile central bank policy makers have been vocal of late in stressing the need to be aggressive in damping price pressures analysts reckon that sharp pullbacks in us gasoline prices may help the headline cpi number show a small monthonmonth decline for august economists expect the yearoveryear rate to fall to 8 see traders see inflation falling for rest of 2022 but that likely wont end fed rate hikes or market volatility markets are pricing in an 92 likelihood that the fed will raise interest rates by another 75 basis points to a range of 3 to 325 at its sept 2021 meeting the central bank is expected to take its fed funds rate target to at least 3754 by december according to the cme fedwatch tool the treasurys auction of 41 billion of 3year notes produced average stats while the sale of 32 billion of 10year notes produced a bidtocover ratio of 237 near the bottom end of the range of the last few years said thomas simons moneymarket economist at jefferies what strategists are saying its the beginning of a week that we expect will provide confirmation of what investors anticipate will be another 75 bp hike when the committee meets on september 21 augusts cpi data will be the departure point for fully pricing in a threequarter point tightening leaving the market to ponder how much of a downside surprise policy makers can ignore in the totality framework said bmo capital markets strategists ian lyngen and ben jeffery