An index measuring wholesale prices was unchanged in February from January, as falling gas prices and rising egg prices canceled each other out. 

The Producer Price Index stayed flat in February after rising a revised 0.6% in January, as gas prices fell 4.7% and egg prices rose 53.6%. Forecasters had expected a 0.3% increase, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

The data shows inflation pressures simmering down faster than expected just before President Donald Trump roiled the inflation outlook in March by imposing, revoking, and promising an array of tariffs against U.S. trading partners that could push up prices if they are actually put into effect. Producer prices influence what consumers pay once products reach the shelves and are considered a leading indicator of consumer price changes.

"The moderation in February conforms with expectations that inflation is set to cool in the coming months before trade tensions start pushing prices upward, though next month’s report will confirm whether February’s softness was a one-off," Justin Begley, an economist at Moody's Analytics, wrote in a commentary.

Evidence of cooling inflation could influence officials at the Federal Reserve, who meet next week to set the key fed funds rate, which influe🦩nces borrowing costs on all kinds of loans.

The Fed has held rates high to discourage spending and stifle inflation but also aims to prevent a severe rise in unemployment. Cooling inflation gives the Fed more leeway to cut rates and boost the economy if Trump's trade wars start to damage the job market.

Financial markets expect the Fed to hold interest rates steady at the policy committee's meeting next week, according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data.