June CPI declined 0.4% and ran 3.5% year over year, and flat monthly inflation weakens the argument for a July hike.

Inflation slowed in June amid a now-defunct Middle East ceasefire, casting doubt on a potential Federal Reserve rate hike next week.

Markets watch monthly core inflation prints and conflict headlines as the 10-year holds near 4.60% and Fed tone stays hawkish.

The Federal Reserve on Wednesday left its benchmark interest rate unchanged at a target range of 3.5% to 3.75%, marking its fourth consecutive pause as it enters the Kevin Warsh era.

CPI rose 0.6% in April and inflation is 3.8%, but a 1.96% spread helps keep mortgage rates near 6.52% not 7%+.