International News 21 February 2025
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Thousands of Indian Investors Lost $1.6 Trillion in Ponzi Scheme
Thousands of Indian investors are currently seeking to retrieve their funds, amounting to nearly $100 million (Rp 1.6 trillion), after being affected by a Ponzi scheme that promised high returns. The scheme, operated under the name Falcon Invoice Discounting, falsely claimed to connect depositors with companies such as Amazon and Britannia. The Telangana police have arrested two individuals in relation to the case. Falcon had managed to raise $196 million (17 billion rupees) from almost 7,000 investors since 2021, but only paid out half of the amount.Several victims, including Ankit Bihani, a New Delhi-based jeweller, are now exploring legal options to recover their lost money. The fraudulent scheme operated through social media to attract investors, and the money from new investors was used to pay off the earlier ones, with the remainder being diverted to shell entities.
Fed Considers Slowing or Ending Quantitative Tightening (QT)
Some officials at the Federal Reserve are considering a slowdown or pause in the reduction of the central bank's balance sheet due to uncertainty over how the US Treasury will manage debt issuance in the coming months.The minutes of the Federal Open Market Committee (FOMC) meeting on January 28-29 highlighted the challenges in understanding market liquidity amidst the government's debate over spending plans and the debt limit. The officials acknowledged that the potential changes in reserves resulting from the debt limit dynamics could impact the Treasury Department's ability to manage its cash effectively.This uncertainty regarding the government's financial management has made it difficult for the Fed to determine whether there is enough or too little liquidity in the financial markets.The reduction of the balance sheet, also known as quantitative tightening, has been a key focus for the Fed.
Potential impact of Trump's policies fuels inflation concerns at the Fed
The US Federal Reserve has expressed concerns about higher inflation due to the initial policy proposals of President Donald Trump.According to policymakers, companies have indicated plans to raise prices in order to offset the cost of import tariffs.The risks to the inflation outlook were highlighted in a meeting held shortly after Trump's inauguration, with factors such as changes in trade and immigration policies, potential supply chain disruptions, and stronger-than-expected household spending cited as potential contributors. The Fed remains confident that price pressures will ease in the future, but other factors, including the passing on of increased costs to consumers through potential tariffs, were noted as possible impediments to the disinflation process.Furthermore, various measures of inflation expectations have recently increased, which is a key concern for the Federal Reserve.