Producer prices rose 3.4% year-over-year in February, according to the Bureau of Labor Statistics data released this morning. That's the largest annual increase since February 2025.

The monthly number is worse. PPI climbed 0.7% in February, more than double what economists had projected, per BLS. Goods prices jumped 1.1%. Services rose 0.5%. This is not the kind of report you want landing hours before the Fed announces a rate decision.

The February PPI data reflects the early impact of the Iran conflict on energy costs and, more broadly, the pressure that $100-plus oil is putting on the supply chain. It's one data point. But it's the freshest data point, and it drops right into the lap of a central bank that was hoping inflation was yesterday's problem.

Here's what's on deck.

The Fed announces its rate decision at 2 PM ET, followed by Chair Powell's press conference at 2:30 PM. Markets are pricing in a near-certainty that rates hold at 3.50% to 3.75%. Nobody expects a move today.

What matters is the dot plot. This is the quarterly release where each Fed official projects where rates will be at year-end. In December, the median dot showed one 25-basis-point cut for 2026. The question now: does that one cut survive, or does the combination of war-driven energy costs and the administration's temporary global tariff (currently 10%, with a possible move to 15%) push the median toward zero cuts, or even a hike? Analysts at OANDA described expectations as a "hawkish hold."

Powell's press conference will matter more than the statement. This is one of his final meetings as chair. His term ends in May. Trump nominated Kevin Warsh to succeed him in January, though Senate confirmation has stalled.

What else moved.

The S&P 500 rose about 0.5% on Tuesday to close around 6,731, per Trading Economics. The Dow gained roughly 200 points. Nasdaq was up about 0.5%. U.S. futures are pointing higher again this morning, with S&P 500 futures up about 0.5% and Nasdaq 100 futures up about 0.6% in early trading.

One reason for the pre-market optimism: Nvidia is reportedly restarting production of its H200 AI chips for the Chinese market after Beijing signaled approval, according to Axios. Huang confirmed the production restart at GTC this week. Nvidia is also reportedly developing a version of its Groq chip tailored for China, per Semafor. NVDA was up over 1% in pre-market.

Brent crude is trading around $103 per barrel this morning, per Investing.com. Gold is trading in a range around $5,000 per ounce ahead of the Fed decision.

The number to watch today is not the rate. Everyone knows the rate stays put. The number is the dot plot median for year-end 2026. If it holds at one cut, markets exhale. If it moves to zero, buckle up.

Fed decision drops at 2 PM ET. Powell speaks at 2:30 PM.

Worth bookmarking: The BLS Producer Price Index page has the full February report if you want to dig into the sector breakdowns yourself.