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The Indian economy is demonstrating strong resilience and is expected to become the world's fastest-growing, supported by low inflation and sustained financial stability, according to a key adviser to Prime Minister Narendra Modi.

Speaking at a New Delhi event on Friday, Shaktikanta Das, who previously served as Governor of the Reserve Bank of India, affirmed this positive outlook while also acknowledging the significant challenges ahead.

Navigating Global Economic Headwinds

Das noted that India will continue to face external pressures. He highlighted several key global risks impacting the economic environment:

• Slowing Global Trade: A slowdown in the growth of international trade is creating a drag on export-oriented economies.

• Strained Multilateralism: The framework of global cooperation is under severe strain, complicating international policy and trade relations.

• Strategic Sector Rivalry: Critical industries, particularly semiconductors, are increasingly being used as tools of geopolitical influence.

These global issues are compounded by the pressure of US tariffs on India, which are among the highest in the region. In response, many investors are adjusting their portfolios to focus more on domestic-oriented sectors that are less exposed to external headwinds.

Low Inflation Creates Room for Policy Support

A core strength underpinning India's economic forecast is its manageable inflation. While the consumer price index in November rose from the previous month's all-time low, it remained comfortably below the Reserve Bank of India's 4% target.

This low-inflation environment provides the central bank with significant flexibility, leaving open the possibility of further interest rate cuts to stimulate economic activity if needed.

Balancing Self-Reliance with Global Rules

Das concluded by emphasizing India's strategic policy posture. He stated that the country remains a strong advocate for a rules-based global system. At the same time, India is actively embracing a policy of self-reliance to safeguard its strategic interests in an increasingly uncertain world.

President Donald Trump on Friday called for a one-year cap on credit card interest rates at 10%, a proposal announced on social media that offered no details on how it would be implemented or enforced.

The move revives a pledge Trump made during his 2024 election campaign, which analysts at the time dismissed because any such cap would require congressional approval. The White House later confirmed the president's call on social media but did not elaborate on the plan.

The Proposal: A Mandate Without a Method

In a post on Truth Social, Trump declared his intention to set the rate cap effective January 20, 2026. "Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies," he wrote.

However, the announcement did not specify how his administration would compel companies to comply, nor did it endorse any existing legislation. Major financial institutions, including American Express, Capital One, JPMorgan, Citigroup, and Bank of America, did not immediately respond to requests for comment.

Bipartisan Concerns Over High Rates

The issue of high credit card interest rates has drawn criticism from lawmakers in both major parties. Republicans currently hold a slim majority in both the Senate and the House of Representatives, where legislative efforts to address the problem have previously been introduced.

Key bipartisan proposals include:

• A bill from Senator Bernie Sanders and Republican Senator Josh Hawley aimed at capping credit card interest rates at 10% for five years.

• A House of Representatives bill introduced by Democratic U.S. Representative Alexandria Ocasio-Cortez and Republican Congresswoman Anna Paulina Luna also seeking to establish a 10% cap.

Despite cross-party interest, these legislative proposals have not yet become law. Opposition lawmakers have criticized Trump for not delivering on his earlier campaign promise to tackle high rates.

Pushback and Economic Warnings

The proposal was met with immediate criticism from some in the financial world. Billionaire fund manager Bill Ackman, who endorsed Trump, labeled the call a "mistake" on the social media platform X.

Ackman warned that forcing rates down could have severe unintended consequences. He argued that without the ability to price for risk, "credit card lenders will cancel cards for millions of consumers who will have to turn to loan sharks for credit at rates higher than and on terms inferior to what they previously paid."

This move also follows the Trump administration's recent action to scrap a Biden-era rule that capped credit card late fees at $8. The administration had supported business and banking groups in a legal challenge that claimed the rule was illegal, and a federal judge ultimately threw it out.

Figure 1: Ukrainian President Volodymyr Zelenskiy meets with British Defence Secretary John Healey in Kyiv amid ongoing discussions about military support.

The United Kingdom has allocated £200 million ($270 million) to fund preparations for a potential troop deployment to Ukraine. This move follows a pledge made earlier this week for British soldiers to join a multinational force designed to operate in the country should a ceasefire be reached.

The commitment solidifies a "declaration of intent" agreed upon Tuesday by British Prime Minister Keir Starmer, French President Emmanuel Macron, and Ukrainian President Volodymyr Zelenskiy at a summit of Ukraine’s allies.

Funding Military Readiness and Upgrades

During a visit to Kyiv on Friday, British Defence Minister John Healey confirmed the new funding. He detailed that the money is earmarked for critical military preparations, including:

• Upgrading vehicles and communication systems

• Enhancing counter-drone protection

• Ensuring troops are fully prepared for deployment

The announcement came just hours after Russia launched a powerful hypersonic missile, an act that Kyiv’s European partners described as an attempt to intimidate them from supporting Ukraine.

The Multinational Force and European Strategy

The proposed Multinational Force for Ukraine (MNFU) is aimed at reinforcing security guarantees for Kyiv. While France has indicated it could send thousands of troops, Britain has not yet specified the size of its potential contribution. Prime Minister Starmer stated on Wednesday that the UK's plans are still being finalized.

Healey emphasized that the new funding demonstrates the government's commitment to "surging investment" into its Ukraine preparations.

A statement from the Ministry of Defence added that the capital spending "sends a clear signal to allies and adversaries of the UK's intent to lead the MNFU, (and) fulfil our promises to secure the peace in Ukraine."

UK to Supply Advanced "Octopus" Drones

In addition to the funding, Healey informed President Zelenskiy that production of Octopus interceptor drones will begin in January. The drones, which are based on a Ukrainian design but manufactured in Britain, will be sent to Ukraine by the thousands each month. This initiative is intended to help the country bolster its defenses against Russian drone attacks.

A coalition of major investment firms has announced its readiness to negotiate Venezuela's $60 billion in defaulted government bonds, potentially paving the way for one of the largest sovereign debt workouts in decades.

The Venezuela Creditor Committee, which includes heavyweights like Fidelity Management & Research Company LLC, Morgan Stanley Investment Management, and Greylock Capital Management, stated on Friday that they are prepared to begin talks once they receive the necessary authorization. A successful debt restructuring, the group noted, would "accelerate financing across all sectors of the Venezuelan economy."

Political Shifts Spark Bond Market Rally

This development follows a thaw in relations between Caracas and Washington after a US military operation ousted President Nicolas Maduro. Acting leader Delcy Rodriguez has expressed a willingness to collaborate with the Trump administration to boost oil production and stabilize the economy.

The political shift has ignited a rally in Venezuelan bonds, which have been in default since 2017.

• Government notes due in 2027 surged over 10 cents this week, marking their largest weekly gain since 2023.

• Debt from the state-owned oil company, Petroleos de Venezuela SA (PDVSA), also saw upward movement.

This recent bond surge has captured the interest of ETF managers and investors specializing in distressed debt. Bondholders are optimistic that negotiations could begin this year, though the timeline remains highly dependent on political factors.

The $170 Billion Hurdle

While the focus is on the $60 billion in bonds, Venezuela's total debt is estimated to be as high as $170 billion when factoring in past-due interest, loans, and other financial obligations. This scale positions the potential workout as one of the most significant in recent history.

However, major obstacles remain. Venezuela is still under US economic sanctions that block its access to capital markets—a critical component for any restructuring plan. Furthermore, the future of the nation's oil industry is uncertain, and oil revenue will be the primary determinant of Venezuela's ability to repay its creditors.

Inside the Creditor Committee's Strategy

The creditor committee, which formed about eight years ago after Venezuela's initial defaults, met on Monday to discuss the latest developments. According to sources familiar with the matter, some members believe Maduro's removal has accelerated the timeline for a potential restructuring.

One key proposal under consideration is to combine Venezuela's sovereign debt and PDVSA's debt into a single, unified restructuring. This approach would create a single pricing baseline for the country's debt and simplify the negotiation process.

The committee is represented by Thomas Laryea of Orrick, Herrington & Sutcliffe LLP. Its membership also includes Grantham Mayo Van Otterloo & Co, Fidera, HBK Capital Management, Mangart Capital, T. Rowe Price Associates, and VR Advisory Services Ltd.

US Banks Explore Opportunities

American involvement in Venezuela's oil sector could create significant opportunities for international banks. JPMorgan Chase, in particular, appears well-positioned due to its historical presence in the country and experience with international trade financing.

While banks like JPMorgan and Citigroup reduced or ceased operations in Venezuela over the past few decades, the current situation may open doors for financing trade or investing in oil infrastructure. Despite the potential, significant challenges to doing business would persist even under an interim government.

JPMorgan could hold a competitive advantage from its 60-year history in Venezuela. The bank maintained a dormant office in Caracas for years after scaling back its operations in 2002, which could be reactivated.

The Department of Energy stated on Wednesday that oil proceeds would be settled in US-controlled accounts at global banks. ConocoPhillips CEO Ryan Lance also noted that US banks, including the Export-Import Bank, might need to be involved in financing Venezuelan oil investments.

Several strategic avenues could open for JPMorgan. One internal idea involved creating a trade bank to finance oil exports, mirroring the Trade Bank of Iraq established in 2003. The bank could also leverage its $1.5 trillion, 10-year Security and Resiliency Initiative to finance investments in critical minerals, which are abundant in Venezuela. Currently, JPMorgan trades non-sanctioned Venezuelan sovereign bonds with offshore counterparties.

The White House Remains Cautious

A White House official confirmed that the Trump administration is carefully weighing all options, with a focus on the best interests of the American people. The official added that any formal announcements would come directly from the administration, dismissing other reports as speculation.

Although Latin America accounts for a small portion of US banks' revenue—just 2.19% for JPMorgan Chase in 2024—Venezuela's strategic importance transcends its economic size. While its economy represents only 0.1% of global GDP, its vast oil reserves give it immense geopolitical and economic significance, as highlighted in a January 5 note from Deutsche Bank economists.

The Trump administration has directed mortgage finance giants Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS). The move is a significant intervention aimed at tackling the persistent housing affordability crisis in the United States.

According to FHFA Director William Pulte, the Federal Housing Finance Agency—which oversees the two companies—has already initiated the program with a $3 billion round of purchases.

A Direct Counter to Federal Reserve Policy

U.S. Treasury Secretary Scott Bessent clarified that the policy is designed to directly offset the Federal Reserve's ongoing reduction of its own bond holdings. The Fed has been allowing its massive $6.3 trillion bond portfolio to shrink, with MBS holdings declining by approximately $15 billion each month.

"What is happening is the Fed has about $15 billion of roll-off every month," Bessent explained in an interview with Reuters. "So I think the idea is to roughly match the Fed, which has been pushing the other way."

U.S. Treasury Secretary Scott Bessent explained that the new policy aims to offset the Federal Reserve's balance sheet actions.

For over two years, the central bank has been steadily reducing its more than $2 trillion stash of MBS at a rate of $15 billion to $17 billion per month. Some analysts believe this process, a legacy of stimulus efforts during the global financial crisis and the pandemic, has prevented mortgage rates from falling more significantly.

Targeting Housing Affordability

The combination of high borrowing costs and elevated home prices has created a severe affordability problem, a key issue weighing on President Trump's approval ratings.

While the average rate on a 30-year fixed-rate mortgage has dropped to around 6.2% from a peak of nearly 8% in 2024, it remains far above the 3% levels seen during the pandemic.

Bessent noted that the new MBS purchases are not expected to lower mortgage rates directly. Instead, the goal is to achieve this indirectly by narrowing the yield spread between the securities issued by Fannie and Freddie and benchmark U.S. Treasuries.

The Role of Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac are central to the U.S. housing market. They buy home loans from banks and other lenders, package them into bonds, and sell them to investors. This process frees up capital for lenders to make new loans.

The new bond purchases will be funded from the two firms' own balance sheets. Amid ongoing discussions about reprivatizing the government-controlled entities, Bessent asserted that the move would not undermine their financial stability. He stated that both companies have sufficient cash and that the purchases could potentially increase their earnings.

Colombian President Gustavo Petro has renewed his sharp criticism of US policy, ending a brief diplomatic truce that followed a phone call with President Donald Trump earlier this week.

In a Thursday interview with the BBC, Petro accused Washington of treating other nations as part of a "US empire." He also leveled a severe charge against US Immigration and Customs Enforcement (ICE), comparing its agents to "Nazi brigades."

This return to a confrontational stance marks a sharp reversal from the tone struck just days ago, highlighting the volatile relationship between the two leaders.

A Brief Truce After a Direct Call

The temporary de-escalation began after Petro and Trump held their first phone conversation. Petro described the call as an opportunity to address what he called the US president's "misconceptions" about drug trafficking.

The discussion appeared productive. Trump stated it was an honor to speak with Petro and that he appreciated his tone. Following the call, Petro told supporters in Bogota that he had intended to deliver a "tough" speech critical of Trump but would now soften his language.

However, for the firebrand former guerrilla, this moderation proved short-lived.

"Nazi Brigades": Petro's Sharp Reversal

In his interview with the BBC, Petro's criticism was unambiguous. He claimed the threat of US military intervention in Colombia was real, citing a history of US violence against his country at the beginning of the 20th century.

His most pointed comments targeted US immigration enforcement, made in response to an ICE officer shooting and killing a woman in Minneapolis. The incident had already triggered demonstrations across the United States.

"For us, ICE operates the same way as the Nazi and Italian fascist brigades," Petro said. "They no longer just persecute Latin Americans in the streets, which for us is an affront, but they also kill US citizens."

In a separate, more measured interview with CBS News published Friday, Petro noted areas of alignment. He said that he and Trump share a similar vision for a power-sharing arrangement in Venezuela between the government of acting President Delcy Rodríguez and the opposition.

Still, he warned that a US attack on Colombia would be a "dumb policy" that could ignite a civil war. The two presidents are scheduled for a face-to-face meeting at the White House in the first week of February.

A Contrast with Regional Leftist Leaders

Petro's foreign policy approach, often characterized by combative late-night social media posts, sets him apart from other leftist presidents in Latin America. Leaders like Mexico's Claudia Sheinbaum and Brazil's Luiz Inácio Lula da Silva have generally adopted more measured tactics, seeking to avoid direct conflict with the Trump administration.

Petro's defiance was on full display last week. After Trump mentioned the possibility of military action against Colombia following the capture of Venezuelan President Nicolás Maduro, Petro called Trump senile and challenged him, saying, "Come and get me!"

A History of Clashes Over Drugs and Sanctions

The friction between the two leaders is rooted in long-standing issues beyond personality clashes. Trump has consistently complained about record levels of cocaine production in Colombia.

These tensions have led to significant diplomatic and economic consequences. Last year, the US government added Colombia to its list of rogue drug-trafficking nations. Washington also canceled Petro's visa after he urged Colombian troops to disobey orders from Trump.

In a more direct move, the US Treasury sanctioned Petro and members of his inner circle in October, effectively cutting him off from the US financial system.