Fed's Preferred Inflation Metric Slips Below Projections

The Federal Reserve's preferred measure of inflation, the PCE price index, dipped to 3.4 percent in August, according to data released by the Bureau of Economic Analysis. This marks a decrease from July's increase and remains above the Fed's 2 percent target for over five years.

The core inflation rate, which excludes more volatile food and energy prices, also decreased to 3 percent in August. Despite this, Federal Reserve officials have signaled that future interest rate hikes may be on the horizon to combat persistent inflation.

Fed Governor Michael Barr stated that 'further policy adjustments' are likely needed to bring inflation down, while Anna Paulson, president of the Federal Reserve Bank of Philadelphia, said economic conditions warrant 'modest further tightening'. The FOMC is set to meet again on October 27-28.