Traders in the U.S. bond market are awaiting the latest consumer price index data and remarks from Federal Reserve Chair Kevin Warsh to gauge how quickly the central bank will continue raising interest rates.

After the Fed unanimously decided to raise rates last month and sent Treasury yields surging sharply, yields were little changed overall last week, hovering near 24-year highs as investors waited for fresh economic data. The U.S. bond market was closed on Monday for a public holiday, while U.S. stocks traded as usual.

This month's nonfarm payrolls report showed a marked slowdown in job growth, prompting traders to expect the Fed to hold rates steady at its next meeting in late October, which limited the scale of bond selling. The market still expects a 25 basis point rate hike in December, followed by two more hikes through the end of 2027. Such market pricing also means that if the September consumer price index comes in higher than expected, it would increase pressure on the Fed to accelerate its pace of rate hikes and could reignite a bond selloff.

Molly Brooks, U.S. rates strategist at TD Securities, said: "The risk around the CPI report is asymmetric. If the data comes in hot, it could signal that the Fed needs to speed up its tightening pace; if the data is softer or in line with expectations, it would continue to reinforce the case for the Fed to act cautiously."

Warsh will hold a conversation with International Monetary Fund Managing Director Kristalina Georgieva from 10:30-11:00 a.m. Bangkok time on Friday (11:30 a.m.-12:00 p.m. Beijing time on Friday). Two other closely watched Fed officials, Governor Christopher Waller and Cleveland Fed President Beth Hammack, will also speak.

Brooks said: "This is the last week before the blackout period, so Fed officials' remarks after the CPI release" will help the market reduce uncertainty about the outcome of the next meeting. She said the market expects Warsh may still avoid providing clear forward guidance.

The U.S. consumer price index will be released on Wednesday. Economists surveyed expect headline CPI to rise 0.6% month over month, up from 0.4% previously; core CPI, which excludes volatile food and energy prices, is expected to slow to a 0.2% monthly gain from 0.3%. On a year-over-year basis, both measures are expected to rise. Headline CPI is forecast to rise 3.6% year over year, while core CPI is expected to rise 2.5% year over year.