Ethereum Price Forecast as Fed Rate Hike Odds Drop on Cooling US Inflation

Ethereum (ETH) experienced a brief spike past $2,700 on September 30 before pulling back to $2,679. This initial upward momentum was triggered by cooler-than-anticipated US Personal Consumption Expenditures (PCE) inflation figures, which subsequently lowered market predictions for a Federal Reserve interest rate hike.

Despite the positive inflation report, the broader crypto market has largely wiped out the gains that immediately followed the release of the August 2026 PCE data. As previously noted by CoinGape, the inflation rate came in at 3.4%, sitting below the anticipated 3.7%. Although this reading remains above the Fed’s 2% objective, the decelerating rate of US inflation suggests that the central bank may face less pressure to implement further rate hikes.

Metrics from the CME FedWatch Tool indicate that the probability of a 25-basis-point rate hike by the Federal Reserve at the upcoming October 28 Federal Open Market Committee (FOMC) meeting has declined to 34%. Similarly, data from CoinGape prediction markets reflects a drop in rate hike expectations from 67% down to 34%.

Typically, a decline in rate hike expectations acts as a bullish catalyst for risk-oriented assets like Ethereum. Should markets continue to anticipate a pause in rate increases from the Federal Reserve at the October FOMC meeting, it has the potential to support future price growth for Ethereum.

On the institutional front, figures from SoSoValue revealed that Ethereum exchange-traded funds (ETFs) experienced $2.81 million in outflows on September 29. This event broke a seven-day streak of inflows and marked the first time Ethereum ETFs recorded net outflows since September 18.

Notably, Ethereum was the sole cryptocurrency ETF category to log outflows on September 29, pointing to a temporary cooling of demand among institutional participants.