The Federal Reserve's willingness to end its interest rate rise campaign here hinges just a few high-frequency data points over the months ahead - and April's inflation readout sits high on that list.

With markets edgy about the U.S. debt ceiling standoff and ongoing ripples from the March regional banking blow out, the running assumption is the Fed's campaign is over and disinflation underway.

Fed officials are loath to admit that publicly however, preferring evidence that the inflation dragon has indeed been slayed given that headline and "core" inflation rates are still running at more than twice the 2% target.

And so Wednesday's consumer price snapshot forms a significant part of that rolling picture.

New York Fed chief John Williams said yesterday it's too soon to say the central bank is done and dusted. "We haven't said we are done raising rates," he said. "If additional policy firming is appropriate, we'll do that."

If consensus forecasts are correct, the April inflation readout later on Wednesday may well force the Fed to keep that equivocal line up for a bit longer. Annual inflation is expected to stick at March's near two-year low of 5.0% - while the higher core rate, excluding food and energy prices, is set to ebb a tenth of a point to 5.5%.

But markets appear happy to jump the gun again. Futures markets show only a 15% chance of another Fed hike next month, with quarter point rate cut almost fully priced by September.

Visibility is low in the fixed income market, however, due to the debt ceiling impasse.

Even though Tuesday's meeting between U.S. President Joe Biden and Congressional leaders was seen as constructive in the face of a tight June 1 deadline for government coffers to run dry - and they agreed to set further talks in motion for later this week - the Treasury bill market continued to gyrate.

One-month bill yields that cross that June 1 crunch point

U.S. 2-year Treasury yields nudged back above 4% ahead of the CPI release later.

Treasury Secretary Janet Yellen now heads to Japan's G7 finance meeting this week ahead of the Hiroshima leaders summit on May 19.

In broader markets, the S&P500 futures were flat to negative after a hefty half percent loss on Tuesday. The VIX volatility gauge was higher at 18, the dollar was firmer and oil prices lower.

China stocks underperformed earlier, with this week's poor import numbers combining with underwhelming corporate earnings.

Also unnerving investors is a sweeping crackdown on due diligence firms and consultancies in China. Reuters reported CICC Capital, a unit of leading Chinese investment bank China International Capital Corp, stopped using consultancy Capvision, following an investigation into the latter on national security.

In Europe, shares of Credit Agricole gained 5.3% after France's second-biggest listed bank beat first-quarter earnings estimates on a boost from trading revenue.

In politics, former U.S. President and possible candidate in next year's White House election Donald Trump was instructed by a jury to pay $5 million in damages for sexually abusing magazine writer E. Jean Carroll in the 1990s and then defaming her by branding her a liar.

Events to watch for on Wednesday: * U.S. April consumer price index, April U.S. Federal Budget * U.S. Treasury auctions 10-year notes * U.S. corp earnings: Walt Disney