US wholesale prices sank in April, logging their biggest monthly drop since Covid stifled the economy, as tariffs put a squeeze on profit margins, according to new data released Thursday.

Inflation could rise this summer as tariffs are reflected in the data, forecasters say. The US tariff rate is high even after the latest deal with China.

Consumer prices rose 2.3% in April compared to a year ago, cooling slightly from the previous month and defying fears of an inflation surge in the aftermath of President Donald Trump's "Liberation Day" tariffs last month. The reading -- which marked the lowest inflation rate since 2021 -- matched economists' expectations.

US consumer prices declined in April, but the full impact of tariffs may not be showing yet. TD Securities' Oscar Munoz discusses what this means for interest rates and markets.

Consumer prices were up 2.3% in April from a year earlier, the Labor Department reported Tuesday, cooler than March’s gain of 2.4%. That was below the 2.4% that economists polled by The Wall Street Journal had expected.

An inflation slowdown in this week's CPI report may be partly caused by an unlikely factor: tariffs. They're pushing down prices by dampening demand

If increased tariffs continue, they could disrupt the progress on bringing down inflation, Federal Reserve Vice Chair Philip N. Jefferson said May 14.

The inflation backdrop improved in April, with a slight annual decrease reflected in the consumer-price index based on a 2.3% yearly rate. But that doesn't necessarily give the Federal Reserve an all-clear to cut rates next month,