U.S. Treasury yields remained largely unchanged on Wednesday as investors treaded carefully before the release of fresh inflation data that could reshape expectations for the Federal Reserve’s next move. The 10-year yield hovered around 4.6%, reflecting a market caught between optimism over cooling price pressures and anxiety that inflation may prove stubborn. Two-year yields, which are more sensitive to Fed policy, also stayed flat a sign that traders are waiting for a clear signal before repositioning.

The calm follows several weeks of volatility driven by shifting rate-cut bets and mixed economic readings. While the labor market has softened slightly, consumer spending remains resilient, making it difficult for policymakers to commit to an easing cycle. For now, the bond market appears to be in “wait mode” digesting each economic print for hints of where inflation is heading next. A softer reading could ignite a rally in Treasuries, but a hot print would likely push yields back up and rekindle concerns about policy tightening.