TREASURIES -US yields slip as inflation rises in June

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CPI data shows mild tariff-related pressures

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US 10-year yield fall after rising three straight days

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Fed funds futures still pricing in two cuts this year

(Adds new comment, details on inflation data, updates yields)

By Gertrude Chavez-Dreyfuss

NEW YORK, July 15 (Reuters) - U.S. Treasury yields dipped on Tuesday after data showed inflation in the world's largest economy increased in June, suggesting the Federal Reserve will likely remain cautious in resuming cutting interest rates this year. The benchmark 10-year yield dipped 1.8 basis points (bps) to 4.409%, compared with 4.413% before the data, falling after rising three straight days.

U.S. 30-year yield fell as well, down 3.5 bps at 4.938% , after hitting a five-week peak on Monday.

U.S. two-year yields, which track interest rate expectations, initially turned positive after the data, but was last flat on the day at 3.894%.

Data showed the Consumer Price Index (CPI)

increased 0.3%

last month after edging up 0.1% in May. June's gain was the largest gain since January. In the 12 months through June, the CPI advanced 2.7% after rising 2.4% in May.

Economists polled Reuters had forecast that the CPI would climb 0.3% and increase 2.6% on a year-over-year basis.

Excluding the volatile food and energy components, the CPI rose 0.2% in June after edging up 0.1% in the prior month. In the 12 months through June, core CPI inflation increased 2.9% after rising 2.8% for three straight months.

"While today's CPI release showed some early signs of tariff impact, on the whole, underlying inflation remained muted. Price pressures, however, are expected to strengthen over the summer and the July and August CPI reports will be important hurdles to clear," wrote Kay Haigh, global co-head of Fixed Income and Liquidity Solutions at Goldman Sachs Asset Management in emailed comments after the data.

"For the time being, the Fed remains in wait-and-see mode. Should underlying inflation, however, continue to prove benign the path remains open to a resumption of the Fed's easing cycle in the autumn."

Fed funds futures, which are tied to monetary policy have priced in about 49 bps of easing by the end of the year, or about two 25 bps of rate cuts each, according to LSEG estimates.

Traders also factored in that the Fed would likely cut rates in September with a 60% probability.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Franklin Paul)