{"id":25153,"date":"2022-12-21T22:37:06","date_gmt":"2022-12-21T22:37:06","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/12\/21\/sterling-asset-management-discusses-how-inflation-and-policy-affects-the-nation-at-2022-investor-briefing-kesi-gardner\/"},"modified":"2022-12-21T22:37:06","modified_gmt":"2022-12-21T22:37:06","slug":"sterling-asset-management-discusses-how-inflation-and-policy-affects-the-nation-at-2022-investor-briefing-kesi-gardner","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/12\/21\/sterling-asset-management-discusses-how-inflation-and-policy-affects-the-nation-at-2022-investor-briefing-kesi-gardner\/","title":{"rendered":"Sterling Asset Management Discusses How Inflation and Policy Affects The Nation at 2022 Investor Briefing \u2013 Kesi Gardner"},"content":{"rendered":"

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October 4th, 2022\u2014 After a pandemic-induced hiatus, Sterling Asset Management Limited was able to press the play button last Thursday, September 29, to host their recognised annual investor briefing in-person, and aired live on Nationwide 90FM. The company\u2019s investor briefings during the pandemic were done virtually.<\/p>\n

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https:\/\/www.youtube.com\/watch?v=oElaP-pO7S8<\/a><\/span><\/p>\n<\/div>\n<\/figure>\n

Moderated by the VP Trading and Investments, Marian Ross-Ammar, the event discussed how inflation and the Bank of Jamaica\u2019s policy responses impact our investments, businesses and lifestyles. Seated on the panel were: Sterling Asset Management\u2019s, President & CEO Charles Ross, ATL Pension Fund Executive Chairman Keith Collister and Lecturer in the Department of Economics at The UWI, Mona Dr. Samuel Braithwaite.<\/p>\n

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\u201cIf you went to the supermarket in 2021 and you bought a basket of goods costing $100 now, in 2022, if you went to the same supermarket and bought the same basket of goods, it would cost $110.20 \u2014 this is what a 10.2 percent inflation rate looks like.\u201d \u2013 Marian Ross-Ammar<\/strong><\/p>\n<\/blockquote>\n

With approximately 100 people in attendance, the event featured breaking news from the Bank of Jamaica (BOJ), which announced, mere hours before the event, that on Friday, September 30, they would add 50 basis points to its policy interest rate, bringing it to 6.5 percent. This increase specifically affects mortgage rates, loan pricing and deposit interest rates. However, Dr. Braithwaite responded by noting that in 2017 the central bank consistently lowered interest rates \u201call the way to 0.5 percent, and I can\u2019t recall any pushback against that.\u201d<\/p>\n

Marian Ross-Ammar opened by saying, \u201cIf you went to the supermarket in 2021 and you bought a basket of goods costing $100 now, in 2022, if you went to the same supermarket and bought the same basket of goods, it would cost $110.20 \u2014 this is what a 10.2 percent inflation rate looks like.\u201d Though that may seem negligible to some persons, as Mrs. Ross-Ammar pointed out \u201cif you multiply that impact across every purchase, every transaction you make, then the effect becomes significant.\u201d As a result, all our plans for the future \u2014 whether to buy a home, retire or invest in your business \u2014 must be adjusted for inflation.<\/p>\n

Mrs. Ross-Ammar posed the first question, \u201cJamaica recorded year-on-year inflation of 10.2% in August; how did we get here?\u201d to Dr. Braithwaite. The respected economist and university lecturer highlighted that interest rates worldwide over the last decade were low. Then, the pandemic happened. He informed the audience and radio listeners that inflation is further impacted when demand is high but supply is stagnant. In addition, the 2022 Russian invasion of Ukraine has disrupted the world\u2019s supply of wheat and oil, the trickle-down effect of which has been significant. A lot of Jamaica\u2019s inflation is externally driven.<\/p>\n

Mr. Collister answered the second question, \u201cHow effective have the BOJ\u2019s steps been in the fight against inflation?\u201d by highlighting that the BOJ has limited tools to combat inflation, \u201cbut the tool we have is transmission mechanism,\u201d said the ATL Pension Fund Executive Chairman. The transmission mechanism describes how \u201cchanges made by the central bank to its monetary policy settings flow through to economic activity and inflation.\u201d A highlight of Mr. Collister\u2019s response was the fact the Jamaican Dollar was one of the few currencies in the world that appreciated in value this year.<\/p>\n

Charles Ross pointed that there has been a disconnect between official policy and what\u2019s happening in the marketplace.<\/p>\n

Mr. Ross quickly noted that despite being a small economy, we don\u2019t have to take prescribed steps as \u201cthe law of economics applies everywhere.\u201d The inflation we\u2019re having, according to Mr. Ross, is a result of the pandemic where \u201cthere\u2019s too much money chasing too few goods.\u201d Mr. Ross quoted American economist Milton Friedman who famously said: \u201cInflation is always and everywhere a monetary phenomenon.\u201d To \u201cbring down\u201d inflation Mr. Ross suggests reducing \u201cthe money supply\u2026 the amount of money out there chasing goods and services.\u201d<\/p>\n

The BOJ\u2019s efforts were lauded throughout the event, especially during the Q&A, where it was shared how the Bank of England\u2019s soaring interest rates have created financial turmoil.\u00a0<\/p>\n

This year\u2019s Sterling Asset Management investor briefing concluded with all in agreement that Jamaica is faring better than many developed and developing nations despite the challenges.<\/p>\n

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