The Ethereum price has continued to fall this month, and a shock warning by a Federal Reserve official points to a further downside. ETH coin dropped to a low of $1,800 following Donald Trump’s announcement of tariffs on imported goods.
Fed Official Warns on Interest Rates
The US will have a minimum global tariff of 10%, while top trading partners like China and the European Union will pay a higher levy. Other countries like Japan and South Korea will pay double-digit tariffs.
Economists agree that these tariffs could trigger inflation in the US since importers may pass those costs to consumers. They also agree that the tariffs will hurt critical US sectors like manufacturing, which relies on imported goods like steel and aluminum. As such, a company like Boeing will be at a disadvantage since most of its manufacturing happens in the US.
A key Federal Reserve official has now issued a warning about interest rates. In a statement, Adriana Kugler, a Fed governor, said that she supported holding interest rates steady to curb higher inflation. She said:
“I will support maintaining the current policy rate for as long as these upside risks to inflation continue, while economic activity and employment remain stable. Going forward, I will carefully assess incoming data, the evolving outlook, and changes in the balance of risks.”
Holding higher interest rates for longer would be bearish for Ethereum’s price because the coin thrives in an era of easy money.
On the positive side, as BanklessTimes noted, there is a likelihood that these Liberation Day tariffs will trigger a recession in the US. While a recession is a bad thing, it would prompt the Fed to slash interest rates, which would favor risky assets like Ethereum and other altcoins. Goldman Sachs predicts the Fed will make three rate cuts this year.
Ethereum Price Prediction
The weekly chart indicates that risks associated with Ethereum are rising. It continues to move past the key support level at $2,125, the lowest since August 5. This level is notable as it was the neckline of the triple-top pattern that peaked at $4,000.
The Ether coin has continued moving below the 50-week moving average, while the Average Directional Index (ADX) has risen to 30, a sign that the trend is strengthening. Therefore, the coin will likely continue falling as sellers target the key support at $1,500.
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