The US Federal Reserve started a key interest rate meeting Tuesday, hours after Donald Trump’s new appointee narrowly won confirmation to join the central bank — while another top official fights her removal by the president.Stephen Miran, the chair of Trump’s Council of Economic Advisers, took the oath of office as a Fed governor early Tuesday, the bank said, as its rate-setting Federal Open Market Committee (FOMC) began a two-day policy gathering.Miran narrowly won a Senate vote on Monday night, making him one of the FOMC’s 12 voting members. Economists expect he will not radically shift this week’s outcome.There is little doubt that the Fed will make its first interest rate cut of 2025 after the latest gathering, as policymakers pivot towards shoring up a deteriorating jobs market.But concerns about political influence targeting the independent central bank will loom over the gathering, as Trump repeatedly bashes Fed Chair Jerome Powell over his rate decisions, and after he moved to fire governor Lisa Cook, sparking a legal battle.On Tuesday, Trump told reporters that the Fed should “listen to smart people like me.”The last-minute addition of Miran is unlikely to drastically alter the meeting’s result, said Oxford Economics’ chief US economist Ryan Sweet.Sweet also cast doubt on whether Miran would have joined in time to submit an economic projection and path for monetary policy.Miran has come under fire from Democratic lawmakers over his plan to take only a leave of absence from his White House role, rather than resign.He is serving out a Fed term which expires in just over four months, filling governor Adriana Kugler’s term after she stepped down.- Court appeal -Trump has separately sought to oust Fed Governor Cook, claiming that mortgage fraud allegations are sufficient “cause” for her removal.So far, Cook, who was appointed by former president Joe Biden, has managed to remain in place for the FOMC meeting.Trump announced in August that he was removing her, and she has been in a legal battle with the president since — a fight that could have broader implications for the Fed moving forward.While a federal appeals court ruled late Monday that she could remain in position while her legal challenge proceeds, the Trump administration is likely to take the case to the Supreme Court.”The administration will appeal this decision and looks forward to ultimate victory on the issue,” White House spokesman Kush Desai told AFP.Although Trump pointed to a criminal referral in announcing Cook’s removal, she has not been charged with a crime and the alleged incidents took place before she was a Fed governor.Since its last cut in December, the Fed has held the benchmark lending rate at a range between 4.25 percent and 4.50 percent as policymakers monitor the effects of Trump’s tariffs on the economy.But markets widely expect a 25 basis points cut at the end of discussions on Wednesday. Investors will also be watching for signals on the number and pace of future rate reductions.Nationwide chief economist Kathy Bostjancic does not anticipate a strong consensus to cut rates by a bolder 50 basis points.But Fed governors Christopher Waller and Michelle Bowman, who voted against the FOMC’s last decision to hold rates steady — instead favoring a rate cut — could now dissent in favor of a larger reduction.They could also be joined by Miran this time, Bostjancic said. 

US President Donald Trump on Tuesday said his country had “knocked off” three boats in total from Venezuela, a day after he confirmed a second deadly US strike on alleged drug traffickers in the Caribbean.”We knocked off actually three boats not two, but you saw two,” he told reporters at the White House before heading to the United Kingdom for a state visit.He did not elaborate on what had happened with the third boat, or if any more people had been killed.On Monday evening, he announced that US forces had struck a second boat in international waters, killing three people he described as “narco-terrorists.”Trump’s administration has faced questions over the legality of such strikes since its first attack earlier this month, which killed 11 people.The US government has released videos of the two previously known strikes and claims it has irrefutable evidence the people killed were traffickers seeking to ship deadly drugs to the United States.It has not, however, provided details to back up those claims, while drug trafficking itself is not a capital offense under US law.The attacks also comes amid spiraling tensions in the Caribbean as a large US naval build-up sparks speculation that Washington may be seeking regime change in Caracas.The United States accuses Venezuelan leader Nicolas Maduro of heading a cocaine trafficking cartel and recently doubled its bounty for his capture to $50 million. Much of the international community rejected Maduro’s July 2024 re-election, with the opposition claiming widespread fraud.”Stop sending drugs into the United States,” Trump said, in response to a reporter who asked him what message he wanted to send to Venezuelan President Maduro.

Wall Street stocks turned lower on Tuesday while the dollar slid as the US Federal Reserve began a two-day meeting at which it is expected to cut interest rates.While the S&P 500 and Nasdaq Composite set fresh record highs as trading got underway in New York, equities soon slid into the red.Stocks have repeatedly set record highs in recent days as a series of data showing a softening of the labour market and moderate inflation have cemented expectations that the Fed will resume cutting interest rates.”The Fed’s focus appears to have shelved inflation concerns for now, instead concentrating on a stalling (US) jobs market, which should lead to a 0.25-percent cut,” noted Richard Hunter, head of markets at Interactive Investor.The rise in stocks, particularly in tech shares, has provoked some concern about them having become overvalued, but City Index and FOREX.com analyst Fawad Razaqzada said investors have largely shrugged off these worries.”So, it looks like investors are taking no chances ahead of the FOMC meeting, choosing to take profit on what has been another amazing bull run for technology stocks,” he said, referring to the Fed committee that sets interest rates.Data released on Tuesday showed retail sales in the United States rose more than analysts expected in August, even as the effects of President Donald Trump’s tariffs ripple through the US economy.Overall sales jumped by 0.6 percent on a month-on-month basis in August, beating expectations of a 0.2-percent gain, showing US consumers are not holding back despite the softening jobs market.Separate data showed US non-fuel import prices rose by 0.4 percent in August, following no gain in July.”Today’s data won’t change the market’s expectation that the Fed will vote tomorrow to cut the target range for the fed funds rate by 25 basis points to 4.00-4.25 percent, but it will presumably temper calls for a 50-basis-point cut,” said Briefing.com analyst Patrick O’Hare.The dollar dropped against main rivals on Tuesday as lower interest rates make the greenback less attractive to investors. Expectations that US interest rates will be reduced over the next few months and possibly into 2026 pushed up gold to an all-time peak close to $3,700 an ounce.The euro hit its highest level against the dollar since 2021.The British pound firmed versus the dollar, with analysts increasingly expecting the Bank of England to maintain its key interest rate on Thursday and for the remainder of 2025.Official data on Tuesday showed UK unemployment remaining at a four-year high of 4.7 percent amid stubbornly high British inflation.European stock markets fell on Tuesday following a steady showing by Asia’s main indices.Shares in Germany’s Thyssenkrupp rose around eight percent in Frankfurt after India’s Jindal Steel International made an offer for the company’s steel division.Sentiment was also supported by Trump announcing on Tuesday that the United States and China had reached a deal over TikTok, which Washington says must pass into US-controlled ownership.Trump said he would confirm the deal when he speaks with his Chinese counterpart Xi Jinping on Friday.- Key figures at around 1530 GMT -New York – Dow: DOWN 0.4 percent at 45,708.99 pointsNew York – S&P 500: DOWN 0.2 percent at 6,604.12New York – Nasdaq Composite: DOWN less than 0.1 percent at 22,332.41London – FTSE 100: DOWN 0.9 percent at 9,195.66 (close) Paris – CAC 40: DOWN 1.0 percent at 7,818.22 (close)Frankfurt – DAX: DOWN 1.8 percent at 23,329.24 (close)Tokyo – Nikkei 225: UP 0.3 percent at 44,902.27 (close)Hong Kong – Hang Seng Index: FLAT at 26,438.51 (close)Shanghai – Composite: FLAT at 3,861.87 (close)Euro/dollar: UP at $1.1841 from $1.1768 on MondayPound/dollar: UP at $1.3646 from $1.3609Dollar/yen: DOWN at 146.60 yen from 147.38 yenEuro/pound: UP at 86.78 pence from 86.47 penceBrent North Sea Crude: UP 1.3 percent at $68.33 per barrelWest Texas Intermediate: UP 1.7 percent at $64.38 per barrelburs-rl/rlp