Traders of futures tied to the Federal Reserve's policy rate added to bets on Thursday that the U.S. central bank would further slow its pace of rate hikes at its next meeting after a government report showed inflation easing last month.

Fed funds futures rose after the U.S. Labor Department reported consumer prices fell last month, reflecting close to an 85% probability that the Fed will raise rates just a quarter of a percent at its next meeting on Jan. 31-Feb. 1, versus just 15% for another half-point hike.

Traders also increased bets on the Fed ultimately stopping rate hikes with the policy rate at just short of 5%, in June. The current target range is 4.25%-4.5%.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)