In March, U.S. producer prices unexpectedly decreased due to a sharp drop in energy product costs, although tariffs on imports are anticipated to push inflation higher in the near future. The Producer Price Index for final demand declined by 0.4% last month, following a 0.1% gain in February as per the Labor Department's Bureau of Labor Statistics. Economists had predicted a 0.2% increase. Over the 12 months leading to March, the PPI rose by 2.7%, down from 3.2% in February. Despite President Trump postponing reciprocal tariffs on trade partners and escalating duties on Chinese goods, inflation may rise due to the existing tariffs and domestic demand softening. Financial markets and consumer inflation expectations have been impacted by the tariffs, increasing the likelihood of a recession within the next year. The Federal Reserve's minutes from March indicate concerns over potentially increased inflation and slowed growth. Market expectations suggest the Fed may resume interest rate cuts later this year.