U.S. inflation in June came in far softer than forecast, likely putting on hold what were fast-rising expectations for imminent Federal Reserve rate hikes.

The Consumer Price Index (CPI) decline 0.4% in June versus economist forecasts for a decline of 0.1% and May's sharp rise of 0.5%.

On a year-over-year basis, CPI was up 3.5% versus forecasts for 3.8% and 4.2% in May.

Core CPI, which excludes food and energy, was flat in June, versus forecasts of 0.2% and May’s 0.2% increase. On a year-over-year basis, core CPI rose 2.6% against expectations for 2.8% and 2.9% in May.

Bitcoin added to earlier gains following the soft numbers, rising to $63,400, up about 2% over the past 24 hours. U.S. stock index futures also rose, the Nasdaq 100 up 1.25%.

Bond yields fell sharply, the U.S. 2-year Treasury down seven basis points to 4.19% and the 10-year down five basis points to 4.56%.

Already a key data point, June's CPI was of particular import after Fed Governor Chris Waller yesterday implied he would be in favor of an immediate rate hike were core CPI not to come down in this morning's report. Indeed, July rate hike probabilities yesterday had shot to as high as 42% from just 8% one month ago, per CME FedWatch.

Investors will get to hear what Fed Chairman Kevin Warsh thinks about all of the above in roughly 90 minutes as he begins his testimony to Congress regarding the state of the economy.