Ethereum Price Skyrockets as Feds' Inflation Gauge Falls Short

Ethereum (ETH) has seen its price swing in reaction to the Federal Reserve's preferred inflation gauge, which came in below market expectations. The top altcoin initially dipped but managed to recover some losses after the release of the PCE Price Index.

The annualized variation of this key metric stood at 3.4% in August, a 30 basis point drop from the consensus estimate for the period. This pullback in inflation expectations led to a decrease in the odds of a rate hike during the next FOMC meeting, from 68% to 37%, according to data from FedWatch.

The market's reaction to this news has seen Ethereum trading volumes steadily rise, as well as a bullish crossover between the 7-day and 30-day moving average for volumes. This is an indication that a bull market has commenced for ETH, which could be setting its eyes on the $3,400 area in the next few weeks.

The Glamsterdam upgrade, a technical overhaul expected to roll out during the fourth quarter of 2026, could also propel ETH to this target. The current price action is mimicking the moves seen during the Pectra upgrade in May 2025, which ultimately pushed ETH to its all-time high.