There is more evidence inflation is easing across broader sectors.

The Labor Department said Thursday that the consumer price index rose 0.1% on an annual basis in June, the lowest since August 2020. Prices are up 0.1% month over month. Economists surveyed by Refinitiv expected an increase of 0.4% on an annual basis and 0.2% on a monthly basis.

Core prices, which exclude more volatile measurements of food and energy, rose 2.4% year over year, less than what economists predicted.

The report follows a similar trend for consumer prices, reported Wednesday, which rose 3% on an annual basis, slightly below the 3.1% increase forecast by Refinitiv economists.

Although inflation has cooled from a peak of 9.1%, it still remains above the Federal Reserve's 2% target rate.

Even with the price pullbacks, 92% of traders are still expecting the Federal Reserve to hike interest rates by 0.25% basis points at the July 26th meeting, according to CME's FedWatch Tool. That would bring the benchmark range to between 525-550.