Fed's Inflation Gauge Dips to 3.4 Percent, Interest Rate Hikes Still on Horizon

The Federal Reserve's preferred measure of inflation, the personal consumption expenditures (PCE) price index, dipped to 3.4 percent in August, a slight decrease from July.

The PCE price index rose 0.3 percent from July to August and was up 3.4 percent year over year, according to data released by the Bureau of Economic Analysis (BEA).

Excluding more volatile food and energy prices, annual inflation in August was at 3 percent.