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[US Treasury yields hover at high levels, PPI takes over as inflation test, Warsh's hawkish remarks suppress CPI gains] ⑴ US Treasury yields remained anchored at recent highs after Tuesday's weaker-than-expected CPI data, with long-term yields particularly strong. Market focus shifts to Wednesday's upcoming June PPI report, expected to show a year-on-year increase of approximately 6.2%, and core PPI around 5.2%. ⑵ The price difference between producers and consumers remains unusually wide, meaning that upstream cost pressures have not yet been fully transmitted to the end consumer, and core PCE faces the risk of further upward movement. ⑶ Federal Reserve Chairman Warsh released a clearly hawkish signal during his congressional testimony, emphasizing that improvements in a single month's inflation data are insufficient to change the overall assessment, and policymakers have "zero tolerance" for persistently high inflation. ⑷ Warsh's remarks echoed previous views by Governor Waller, who stated that several consecutive months of lower-than-expected readings are needed to confirm that inflation is moving in the right direction. ⑸ Current inflation faces four overlapping pressures: the inertia of core inflation before the Iranian conflict, the impact of import tariffs, disturbances in the energy and commodity markets, and increased demand brought about by the AI investment cycle. (6) Diesel prices have surged to over $5 per gallon. The Russian export ban, coupled with the escalating US-Iran military conflict, has led to a continuous rise in transportation and production costs. The transmission of PPI to CPI is only a matter of time. (7) In terms of trading, short-term operations are biased towards range-bound trading. The reference range for the two-year yield is 4.14% to 4.30%, and for the ten-year yield, it is 4.52% to 4.68%. Wednesday will also see the release of the New York Fed's manufacturing survey, the Beige Book, and speeches from several Fed officials.