Treasuries extended their slide as traders braced for US inflation data that could cement concerns the Federal Reserve is dragging its feet on price growth. The bond market selloff deepened ahead of the Consumer Price Index release, with yields on 10-year notes climbing to fresh highs.

Investors are increasingly worried that sticky inflation will force the Fed to maintain restrictive policy longer than anticipated. Swaps markets now price in fewer rate cuts this year, reflecting diminished confidence in a swift pivot.

The Treasury curve bear-steepened as long-term yields outpaced short-end moves. Two-year yields hovered near multi-month peaks while 30-year bonds led losses. Primary dealers absorbed heavy supply in recent auctions amid tepid demand.

Strategists warn that a hot CPI print could trigger another leg higher in yields, testing key technical levels. The dollar strengthened broadly as rate differentials widened, pressuring risk assets globally.