Federal Reserve Chair Kevin Warsh sits before the House Financial Services Committee on Tuesday, hours after the Bureau of Labor Statistics releases June consumer price data at 8:30 a.m. ET and one day after Fed Governor Christopher Waller floated a near-term interest-rate increase.

The overlap raises the stakes for Warsh's first congressional appearance as chair. Federal-funds futures now imply a 39 percent chance of a rate hike at the July 29 policy meeting, up from 26.7 percent a week ago, according to the CME's FedWatch tool. The 10-year Treasury yield rose more than a basis point to 4.622 percent early Tuesday; the 2-year yield, more sensitive to Fed policy, added a basis point to 4.277 percent, CNBC reported.

The June print

Economists expect headline inflation to have eased to 3.8 percent in June from 4.2 percent in May, driven by an oil-price plunge after the mid-June U.S.-Iran memorandum of understanding. Core inflation, which strips out food and energy, is forecast at 2.8 percent, down from 2.9 percent, according to NBC News. CNBC's economist consensus had core holding at 2.9 percent. Either reading would leave underlying prices well above the Fed's 2 percent goal.

The energy tape has swung in both directions. Oil fell from the mid-$90s to about $70 a barrel after the memorandum, then rebounded toward $80 as the ceasefire frayed and Iranian strikes hit tankers off Oman last week. West Texas Intermediate futures traded 3.2 percent higher at $80.66 on Tuesday morning; Brent crude, the international benchmark, added 4.3 percent to $86.90. Gasoline, which had been declining, reversed at $3.79 a gallon and climbed 8 cents Monday, NBC News reported. The rebound followed President Trump's Monday announcement that the U.S. would blockade Iranian ports and impose a 20 percent fee on cargo transiting the Strait of Hormuz.

Waller's warning

Waller said Monday, according to Semafor: "If we get another hot reading on core inflation this week, then the [Fed] will need to consider tightening monetary policy in the near term." That reversed the market's assumption from a week earlier, when tanker damage and Hormuz closures had pushed traders to price the next Fed move as a cut to counter oil-driven demand destruction.

The AI factor

Artificial-intelligence infrastructure is pushing goods prices as technology companies compete for memory components. "We have never seen a component price increase this much, this quickly," Apple said in comments cited by NBC News. Société Générale strategists wrote that "With the MOU on life support and tensions escalating in the Middle East," inflation expectations face "renewed pressure." Warsh, who has announced a set of task forces since taking the chair, will likely field questions about their scope Tuesday, according to Semafor.

Neither the White House nor Treasury officials had publicly commented on the CPI print or Waller's remarks by press time. Nor did Tuesday morning's reporting on Warsh's testimony carry an administration voice arguing against tightening, leaving Warsh's own posture — and whether he echoes Waller or holds to his stated reluctance to preview rate decisions — as the day's likely market tell.

Warsh testifies before the Senate Banking Committee on Wednesday.