Federal Reserve officials’ latest inflation projections are already looking too high following the release of new data on consumer prices, suggesting another interest-rate increase this year is even less likely.

Prices of personal consumption expenditures excluding food and energy, the Fed’s preferred measure of underlying inflation, rose just 0.1% in August, and 3.9% from a year earlier, according to Bureau of Economic Analysis figures published Friday.

Economists expect softening monthly increases will continue to pull the annual rate down further over the remainder of the year. By contrast, the median Fed official’s projection — for a 3.7% rate to close out 2023 — would require a substantial pickup over the next several months, according to Neil Dutta, the head of economics at Renaissance Macro Research LLC.

“Core PCE must rise 0.3% per month over the next four months, or 4% annualized, somewhat faster than the pace this year” to hit the Fed’s estimate, Dutta said Friday in a note to clients. “That’s a relatively tall order and supports the idea that the Fed is unlikely to hike at either of the next two meetings.”

The US central bank left the target range for its benchmark interest rate unchanged this month at a 22-year high of 5.25% to 5.5%. But quarterly economic projections published alongside the rate decision showed 12 out of 19 Fed officials penciled in at least one more rate increase for this year.

Still, Fed Chair Jerome Powell stressed that they would be guided by the economic data in determining whether another rate hike is needed, which is why their projection for inflation is so important.

Analysts at forecasting firms including Capital Economics, Inflation Insights LLC and 22V Research made similar points about the Fed’s inflation forecasts being too pessimistic after the release of the BEA figures Friday.

Investors also marked down the chances of another rate increase to less than 40% upon seeing the numbers, according to futures.

Later Friday, a senior Fed official suggested the central bank may have already wrapped up the most aggressive tightening campaign in four decades, though he said policymakers would keep rates high for “some time” to bring inflation down to their 2% goal.

“My current assessment is that we are at, or near, the peak level of the target range for the federal funds rate,” New York Fed President John Williams said in remarks prepared for an event in Long Island, New York.

Read More: Fed’s Williams Suggests Rate Hikes May Already Be Finished