U.S. producer prices increased more than expected in February. The Labor Department said on Tuesday that its producer price index for increased 0.3 percent last month after rising 0.6 percent in January. The current year-on-year gain was the largest in nearly five years, an indication that inflation pressures are now present in the U.S. economy.

In the 12 months through February 2017, the Producer Price Index has jumped 2.2 percent, which is the biggest such rise since March 2012.  It followed a 1.6 percent increase in January.  Adding to the price inflation is the U.S. dollar’s 1.5 percent drop against those currencies of it’s chief trading partners since January.

The so-called Core PPI, which excludes food, energy and trade services, increased 0.3 percent in February, the largest gain since April 2016.  The Core PPI has increased 1.8 percent in the 12 months through February, 2017

Federal Reserve officials were expected to start a two-day policy meeting later on Tuesday.The Fed is widely believed to be inclined to raise its overnight benchmark interest rate by 25 basis  points, to a range of 0.75 percent and 1.00 percent.  Moreover, it now projects that there could be three (3) such hikes in 2017.