Most cryptocurrencies rose during trading on Tuesday amid optimism in the markets that the Federal Reserve is moving toward cutting interest rates.

Economic data released today showed an increase in the U.S. retail sales index during August by 0.6%, while analysts had expected the index to grow by 0.2% after growth of 0.5% during July, which was revised upward to 0.6%.

The Fed meeting began today, Tuesday, and ends tomorrow, Wednesday, with widespread expectations of an interest rate cut of 25 basis points, amid Trump’s pressure to lower borrowing costs at a faster pace.

According to the FedWatch tool from CME Group, markets see a 99.6% probability of a 25 basis point cut, versus only a 0.4% chance of keeping rates unchanged.

Ripple

On the trading front, the price of Ripple rose by 1.9% to $3.05 on the CoinMarketCap platform as of 21:18 GMT.

Federal Reserve officials meet on Tuesday and Wednesday in a pivotal meeting under unprecedented circumstances.

It is expected that monetary policymakers, at the conclusion of their two-day meeting on Wednesday, will announce the first interest rate cut since December, in an attempt to support the slowing U.S. labor market, with hopes that the broad tariffs imposed by President Donald Trump will have only a limited impact on inflation.

But there is an “elephant in the room” occupying discussions about the U.S. economy: Trump’s intense effort to reshape the top of the Federal Reserve.

The Senate on Monday confirmed the appointment of Stephen Miran, Trump’s senior economic adviser, to the Fed’s Board of Governors to fill a vacant seat expiring next January, with the possibility of extension. Miran confirmed that he would not commit to resigning at the end of the term if no permanent successor is appointed. After being sworn in on Tuesday morning, he is now able to vote in this week’s monetary policy meeting.

In addition, Lisa Cook, a member of the Board of Governors whom Trump attempted to remove in late August, will also vote. An appeals court rejected on Monday Trump’s attempt to dismiss her, while her lawsuit against the removal decision proceeds. Cook is the first Fed Board member to face an attempted dismissal.

The latest meeting is extraordinary, not only because the central bank is finally changing its strategy on interest rates, but also because of the developments related to its powerful board, amid increasing pressure from the Trump administration on an institution long considered politically independent.

The main reason behind the cut

The basic motives behind cutting borrowing costs for the first time in nine months are increasing signs of labor market weakness, along with a growing conviction among Fed officials that tariff-driven inflation may be temporary.

During the summer, job growth was weak: employers added only about 29,000 jobs on average during the three months ending in August, a rate slightly higher than July, but still the weakest since 2010 except for the pandemic period.

Also, the number of unemployed people seeking work exceeded the number of available jobs, while new jobless claims in the week ending September 6 rose to their highest level in nearly four years. Likewise, the number of people unemployed for more than 26 weeks in August reached its highest since November 2021.

A preliminary revision of employment data for the year ending in March, published last week, showed that the U.S. labor market was weaker than believed before entering the summer.

Fed Chair Jerome Powell paved the way for this cut during a notable speech in late August when he said that “downside risks to employment are increasing.” Other officials echoed these concerns, the most prominent among them initially being Governors Christopher Waller and Michelle Bowman, both Trump appointees, who supported a rate cut in July.

The Fed’s new economic projections, due on Wednesday, are set to reveal how fast and deep interest rate cuts will be in the coming months amid the fragility of the labor market.

The Fed’s position on tariff inflation

Although inflation has risen in recent months — due to Trump’s broad policies, especially tariffs — Fed officials have become more convinced that any increase may be temporary.

The consumer price index rose in August by 2.9% year-on-year, in line with economists’ expectations, according to Labor Department data last week. For months, consumer inflation readings have been consistent with forecasts, despite the confusion caused by tariff implementation.

San Francisco Fed President Mary Daly recently wrote that “price increases associated with tariffs will be one-off.” St. Louis Fed President Alberto Musalem said in a speech this month that he expects “tariff effects to work their way through the economy within two to three quarters, and their impact on inflation to fade thereafter.”

Christopher Waller confirmed in a speech in Miami on August 28 that “inflation has risen since the first quarter, but these figures include the effects of increased tariffs on imports, which I expect will only temporarily raise inflation.” He added: “Most forecasts indicate that annual inflation will continue to rise slowly for a few more months, with the monthly tariff effects fading by early 2026.”

An unprecedented pressure campaign from Trump

While Fed officials try to understand a complex economic puzzle, the Trump administration continues to exert pressure on the central bank, which has traditionally enjoyed political independence.

Since the beginning of his second term, Trump has repeatedly and publicly criticized Powell and the Fed for refusing to cut interest rates this year. Monetary policymakers postponed the rate cut until this week to first see the effects of Trump’s policies.

Trump had threatened earlier this year to dismiss Powell, but backed down after advisers warned him that it could spark sharp volatility in financial markets. In July, the administration used the Fed headquarters renovation project in Washington — with a cost of $2.5 billion — as a pretext to try to remove Powell, accusing him of mismanagement. Trump and Powell engaged in a public dispute over the project’s total cost.

Trump is also now attempting to remove Cook on allegations of mortgage-related misconduct, still under Justice Department investigation. However, the courts have kept Cook in her position while her case against the dismissal continues. Recent documents — reported by the Associated Press — showed that Cook’s apartment in Atlanta, which the administration says is one of two homes she identified as her primary residence, had been declared as a vacation home. Cook denied any wrongdoing.

While Cook’s status remains pending, Miran’s appointment has raised concerns among Democrats because of his closeness to the president. But he confirmed his commitment to ethics laws, stressing that he would express independent views on the economy. He said during his confirmation hearing: “I am very independent-minded, as demonstrated by my willingness to depart from consensus, and I expect to continue doing so if confirmed.”

Trump has expressed his desire for Republicans to form a majority within the Fed’s Board of Governors, and Miran’s confirmation process was accelerated — taking only about a month from nomination to swearing-in, while usually it takes several months — allowing him to participate in the September meeting.

Most observers already expect the Fed to announce a cut of no less than a quarter percentage point at the conclusion of the meeting, whether or not Miran participates.

Copper prices fell on Tuesday despite a decline in the dollar against most major currencies, due to expectations of production growth in Chile.

Chile, which represents about a quarter of global copper production, expected its output to expand during this year despite the challenges facing two of its largest mines, providing some relief to a global market suffering from tight supply.

A fatal accident at the largest mine of state-owned Codelco, in addition to problems in mine waste at a project run by Teck Resources Ltd., complicated Chile’s efforts to reach its annual target estimated at about 5.6 million metric tons. However, the giant Escondida mine of BHP recorded an 11% increase in output in the first half compared to the same period last year, while the Collahuasi mine is preparing to exit from a period of low-grade ore production, and the El Salvador mine, after its redevelopment, has begun to increase its operating capacity.

Mining Minister Aurora Williams said, in an interview from her office in downtown Santiago, that she still expects growth this year and next, reaching a record level of 6 million tons by 2027. She added that this would be a remarkable achievement for a country whose production fell to its lowest level in 20 years in 2023, at a time when companies are struggling to renew old mines and find new deposits that are difficult to develop. She also pointed out that the outlook for the metal is improving in the long term.

Williams said: “I believe that production will increase, and that Chile will be able to enhance its participation in the global market. Market indicators show more supply in the future.”

This comes with the rise in global demand for copper used in electrical wires, driven by the transition toward clean energy and the construction of more data centers to operate artificial intelligence technologies.

But the copper market has previously experienced disappointments from Chile, as the state copper agency Cochilco expected several years ago that production would exceed 7 million tons by now, which has not yet been achieved. And Codelco remains a key player in that equation, as it tries to compensate for years of weak investments.

Expectations have recently improved with the conclusion of two integration deals expected to add nearly 300,000 tons to the country’s total output, according to company estimates. Codelco is putting the final touches on a merger between the Andina mine and Anglo American’s Los Bronces mine, while Anglo and Teck are working on a similar deal to merge the Collahuasi and Quebrada Blanca mines. In addition, BHP and Lundin Mining Corp. have a major project on the border with Argentina, and BHP and Rio Tinto are cooperating in promising exploration projects with Codelco.

The minister considered that the merger agreement between Anglo and Teck represents a “positive signal” about the vitality of Chile’s mining industry and the global copper market.

Regarding the recovery of the El Teniente mine from a tunnel collapse that killed six workers, Williams said that Codelco may have to use other means — such as more automation — to reach deeper levels of deposits, depending on the results of the investigation being conducted by the Sernageomin authority.

She added: “Chile faces the challenge of developing underground mining at increasing depths. And if there are risks, in a country where safety is a priority, we will have to look for alternative mechanisms.”

On the other hand, the dollar index fell by 0.5% by 16:15 GMT to 96.8 points, and recorded the highest level at 97.3 points and the lowest level at 96.7 points.

As for trading, copper futures for December delivery fell by 0.2% to $4.70 per pound at 16:10 GMT.

Bitcoin prices moved in a narrow range on Tuesday, extending recent gains amid growing conviction that the Federal Reserve will cut interest rates this week. However, most altcoins underperformed, while concerns over the sustainability of large corporate investments in digital assets capped Bitcoin’s upside.

Bitcoin rose 0.3% to $115,300 by 13:19 GMT, after gaining about 5% over the past week.

Bitcoin in Waiting Mode Ahead of the Fed

The world’s largest cryptocurrency has recovered part of the steep losses suffered between mid-August and early September, but remains well below its August peak. The market has faced heavy profit-taking alongside mounting worries about the growing reliance of corporates on their treasuries as a vehicle to hold Bitcoin.

Those concerns intensified after Strategy (formerly MicroStrategy) was rejected for inclusion in the S&P 500, prompting JPMorgan analysts to warn that the lack of such index entries undermines the long-term viability of the corporate treasury approach. This trend has left the crypto sector lagging behind the rally in other high-risk assets, particularly equities.

Fed Decision in Focus

Digital asset markets are now bracing for the Fed’s policy meeting, with CME FedWatch data showing a 99.6% probability of a 25 basis-point rate cut and just 0.4% for no change. Lower interest rates typically boost risk assets like cryptocurrencies by increasing market liquidity, but uncertainty remains over the longer-term easing path given persistent inflation concerns. Despite growing pressure from the White House, Fed Chair Jerome Powell has maintained a cautious stance without committing to further cuts.

Strategy Expands Its Bitcoin Bet

In a filing with the U.S. Securities and Exchange Commission, Strategy disclosed the purchase of an additional 525 Bitcoin between September 8 and 14, worth about $60.2 million at an average price of $114,562 each.

This brings the company’s holdings to 638,985 Bitcoin, with a market value near $73.4 billion, compared to a total acquisition cost of $47.2 billion, or an average of $73,913 per coin including fees and expenses.

Executive Chairman and co-founder Michael Saylor said the holdings now account for more than 3% of Bitcoin’s capped supply of 21 million coins. At current prices, the company sits on paper gains of roughly $26 billion.