TREASURIES-Two-year inflation expectations rise to highest since 2022

LONDON, Feb 13 (Reuters) - Short-term investor expectations for U.S. inflation hit their highest since 2022 on Thursday, following a hot read of consumer prices the day before that put nominal Treasuries under pressure.

The two-year breakeven inflation rate USBEI2Y=RR, which is derived from subtracting the inflation-linked two-year Treasury yield from that of the nominal two-year note US2YT=RR, rose to as high as 3.338% in London trade, its highest since the summer of 2022, before subsiding to around 3.16%.

This is well beyond the Federal Reserve's 2% target for consumer inflation.

U.S. data on Wednesday showed the consumer price index rose at an annual rate of 3.0% in January, up from 2.9% in December and above forecasts for a rise of 2.9% year-on-year.

Energy, food and shelter prices all contributed to the increase. The core rate, which excludes food and energy, also rose by more than expected.

By Thursday in Europe, two-year Treasuries were down 2 basis points on the day at 4.342%, having shot up by nearly 10 bps on Wednesday in their biggest one-day selloff in a month.

Following the CPI data, the futures market was barely pricing in one 25-bps rate cut this year from the Federal Reserve this year, compared with around 35 bps worth of cuts prior to the report. 0#USDIRPR

U.S. President Donald Trump is on the verge of announcing another round of tariffs, which many believe will contribute to a sustained rise in inflation, as the price of imports increases.