US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, refreshed weekly high to 2.54% by the end of Tuesday’s North American session, per the FRED website.

In doing so, the inflation gauge rose the most since November 10, also extending the bounce off monthly low.

The firmer inflation expectations keep fears of the Fed’s early rate hike on the table, which recently gained support from Fed Chair Powell as he showed readiness to hike interest rates to stop inflation from being entrenched.

However, today’s US Consumer Price Index (CPI) will be crucial to watch for near-term market direction as Powell also signaled that the “supply crunch will ease somewhat” while suggesting the balance sheet runoff could happen "perhaps later in the year."

Read: US Inflation Preview: Dizzying heights of 7% would cement a March hike, supercharge the dollar