US bond traders are turning their attention to inflation data to determine if there is still hope for a rate cut by the Fed in September.

US Treasury bond traders will closely monitor the inflation data released on Thursday, looking for signs that price pressure is continuing to see if the Federal Reserve will keep interest rates at higher levels for a longer period of time. US Treasury bonds recovered some lost ground from Wednesday; the Federal Reserve kept overnight rates unchanged, with Chairman Jerome Powell hinting that investors may have to wait longer for the first rate cut of the year. Expectations for a rate cut in September have been significantly reduced from 80% to 40%. If the US personal consumption expenditure price index shows stubborn inflation, expectations for a rate cut may be further delayed. Economists surveyed by Bloomberg expect the core PCE month-on-month growth rate to increase from 0.2% to 0.3%.