Thus, inflation excluding unprocessed food and tobacco posted a smaller decline, according closely with the upper bound of the July Inflation Report forecast (Chart 9). The inflation outlook remained benign amid waning cumulative exchange rate effects, weakening demand conditions and modest import prices. Cost pressures driven by producer prices remained subdued in this period. On the other hand, rising tobacco prices and adjustments in fuel taxes hampered the improvement in inflation. Therefore, consumer inflation fluctuated while annual core inflation remained on a downward track through the third quarter. After a slight increase in the previous quarter, annual food inflation recorded a sharp drop in the third quarter, standing far below the path projected in the July Inflation Report. The slowing food inflation was mostly attributed to the waning tourism demand, the contraction in exports to Russia and the measures placed on red meat. Food inflation excluding fresh fruits and vegetables fell to a five-year low of 4.78 percent in September (Chart 10). Meanwhile, despite the sluggish economic activity and the slowing food inflation, services inflation remained high mostly due to rising real unit labor costs and rent. 5 / 10  BIS central bankers' speeches  The underlying core goods inflation slowed down in the third quarter as a result of moderate exchange rates and weakening domestic demand. On the other hand, the underlying services inflation increased. Accordingly, the underlying core inflation indicators remained largely flat compared to the previous quarter (Chart 11).
It is a bold assertion, but not necessarily an unreasonable one, reflecting the dollar value of transactions processed across the Fedwire Funds, Fedwire Securities, and National Settlement Services; the interconnectedness and dependencies between these services and other systemically important infrastructures; our role as central securities depository and as fiscal agent for the issuance, maintenance, and redemption of all Fedwire-eligible securities; and as the platform across which the Federal Reserve ultimately settles its monetary policy operations. Any one of these elements would likely qualify the wholesale services as “systemic”; in the aggregate they represent a staggering portfolio on which the execution of both our nation’s fiscal and monetary policies ultimately depends. In recognition that a wholesale service outage risks a significant shock to the United States, and in light of the escalating threat landscape in which collectively we operate, last year before this audience I shared a series of reflections endeavoring to advance a new paradigm for resiliency and security for financial market infrastructures. This year I’d like to provide an update on our progress on this front, and then to elaborate on the portfolio of wholesale service initiatives that we are endeavoring to advance to add value for customers and end users. As always, my remarks reflect my own views and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System.