• Federal Reserve Chair Jerome Powell said on Wednesday the U.S. central bank will make interest rate decisions "when and as" they are needed, pushing back on a suggestion that a September rate cut could be seen as a political act ahead of the fall presidential election.
• The state of the economy, and particularly the surge in housing, food and other costs in recent years, has been a potent issue for Republicans given public sentiment that remains sour given the high price of many items even as inflation itself has slowed. Rate cuts initially expected early this year were pushed back after inflation proved stickier than expected, with the Fed's monetary policy debate now lined up squarely with the fall campaign.
• Republicans focused on the conditions that would warrant lower rates and encouraged Powell to not move until inflation was beaten; Democrats tried to draw him out on issues like proposals by a Republican-aligned group, called Project 2025, to overhaul and potentially weaken the Fed, and cited their concerns about rising unemployment.
• Powell, over his two days of commentary before the Senate and House committees that oversee the central bank, indicated the Fed was edging closer to a rate cut decision, while also insisting that he was not yet ready to declare that inflation had been beaten. Powell and other Fed officials have said they will not cut interest rates until they have gained even greater confidence that inflation is headed back to the central bank's 2% target after a breakout surge during the pandemic.
• After hitting a 40-year high in 2022 the Fed's preferred measure of inflation, the Personal Consumption Expenditures Price Index, was 2.6% as of May. Powell reiterated the central bank will need to cut rates before the figure returns fully to 2%, but after the underlying momentum seems likely to take it there.
• The Fed next meets on July 30-31. While officials are expected to maintain the benchmark interest rate at the comparatively high 5.25% to 5.5% range approved in July of 2023, further progress on inflation could lead to key changes in their policy statement that pave the way for a September cut.

(Source: Reuters)

• China's consumer prices grew for a fifth month in June but missed expectations, while producer price deflation persisted, with domestic demand mired on a slow recovery track despite support measures for the world's second-largest economy.
• Beijing has sought to revive consumption after a stuttering post-COVID recovery, but concerns are lingering over more fundamental issues including a protracted housing downturn and job insecurity. That has dented consumer and industrial activity and reinforced calls for more effective policies.
• The consumer price index (CPI) in June rose 0.2% from a year earlier, against a 0.3% uptick in May, the slowest in three months, data from the National Bureau of Statistics showed on Wednesday, below a 0.4% increase forecast in a Reuters poll. "The risk of deflation has not faded in China. Domestic demand remains weak," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
• Food prices fell even more, despite supply disruptions caused by bad summer weather, underlining the soft demand. Food prices slipped 2.1% year-on-year, compared with a 2% decline in May. Notably, fresh vegetable prices tumbled 7.3% versus a rise of 2.3% in May. A decline in fresh fruit prices deepened to 8.7% from 6.7% in May.
• CPI edged down 0.2% month-on-month, versus a 0.1% drop in May and worsening from an expected 0.1% fall. The producer price index (PPI) fell 0.8% in June from a year earlier, less than a 1.4% decline the previous month, and matched a forecast 0.8% fall.
• The fall in the PPI was the smallest in 17 months, mostly attributable to a lower base last year. "The deepening declines in factory-gate prices of consumer durables underscores that excess manufacturing capacity remains a worsening issue," said Gabriel Ng, assistant economist at Capital Economics.
• "Government policy is still prioritizing investment, which is set to exacerbate the problem further. This will continue to weigh on inflation," said Ng, who estimated full-year CPI would rise just 0.5%, well below an official inflation target of 3% for 2024.

(Source: Reuters)

• A.S. Bryden & Sons Holdings Limited (ASBH), a company incorporated in Trinidad and Tobago, has announced that it has acquired a 44.8% strategic stake in Caribbean Producers Jamaica (CPJ) Limited.
• CPJ is a leading food and premium beverage distributor for major global brands focusing on serving hotels and resorts with operations in Jamaica and St. Lucia.
• ASBH acknowledges that its acquisition represents more than 20.0% of the issued share capital of CPJ under the Jamaica Stock Exchange’s General Principles relating to Takeovers and Mergers and the applicable securities regulations in Jamaica.
• Consequently, the company must submit a written statement to the Exchange and the listed company at its registered office or principal place of business via registered mail. This statement must include the amount of equity being acquired, the purpose of the acquisition, whether further acquisitions are planned, and if there is an intention to take control.
• For any additional 5.0% or more of the equities acquired, ASBH must, at the time of that acquisition, provide a similar statement until it has acquired 50.0% of the equity of
• ASBH is now the largest shareholder of CPJ. The company plans to continue making additional purchases of CPJ shares in the future to acquire control.
• The investment is consistent with ASBH’s strategy of expanding its business regionally, and its stake in CPJ will give it additional scale and expand its geographic footprint beyond Trinidad, Barbados, and Guyana to now include Jamaica and St. Lucia.
• Additionally, it will provide ASBH with new capabilities to serve the hotel, resort, and restaurant channels and give our business access to hard currency earnings.

(Source: JSE)

• Jamaica has already welcomed a record-setting two million visitors in 2024, showcasing the island’s beauty and vibrancy.
• To express gratitude, the Jamaica Tourist Board is introducing a limited-time “JAMGETAWAY” offer, providing up to 65% off at 50 participating hotels across six resort areas. The savings apply to reservations made between June 15 and July 31, 2024, for travel between September 1 and December 1, 2024.
• Participating resorts extend from Montego Bay to Negril, Ocho Rios, Kingston, Port Antonio and Jamaica’s South Coast. They include Sandals Montego Bay, Couples San Souci, The Cliff Hotel, AC Hotel Kingston, Trident Hotel, Sandals South Coast and many more.
• Tourism Minister, Hon. Edmund Bartlett highlighted that the country has seen unprecedented visitation in 2023 and 2024 and is now ahead of its schedule to achieve its goal of five million annual visitors.

 (Sources: JIS & Travel Pulse)

• The Dominican Association of Investment Fund Management Companies (Adosafi) emphasized the crucial role of investment funds in the Dominican Republic’s social and economic development at the UN’s Forum for Sustainability.
• Investment funds facilitate financial inclusion by allowing millions of Dominicans to participate in the country’s economic growth, with investment opportunities starting at RD$10,000. Santiago Sicard, CEO of Adosafi, highlighted their role in generating over 30,000 jobs and developing infrastructure such as roads, parks, and libraries.
• These initiatives also secure future pensions for many Dominicans. Supporting the UN’s 2030 Agenda for Sustainable Development, investment funds in the Dominican Republic have invested over USD$1,600Mn in 93 projects across 24 funds.
• Notably, in the energy sector, these funds have diversified energy sources and reduced carbon emissions significantly. Additionally, investment funds boost the tourism and real estate sectors, promoting community development, labour inclusion, and sustainable construction standards.
• Santiago reiterated that investment funds create profitability and wealth for Dominicans while contributing to social and environmental development. Their transformative power in promoting and democratizing development and sustainability has increased interest among individuals, businesses, and government officials in these financial instruments.
• In summary, investment funds are catalysts for sustainable development, driving economic growth, environmental sustainability, and social inclusion in the Dominican Republic.

(Source: Dominican Today)

• Fitch Solutions is maintaining its core view that growth in Bermuda will slow over the coming years after a stronger-than-expected post-pandemic rebound. Fitch forecasts real GDP growth of 2.3% in 2024 and 2.1% in 2025, down from a revised estimate of 4.3% growth in 2023.
• The tourism and international financial service sectors will remain key drivers of headline growth, though less favourable base effects, capacity constraints and slower growth in the US - the main source market for tourists - will pose headwinds over the coming quarters.
• Fitch expects domestic demand growth will moderate after recovering to pre-pandemic levels, with cost of living pressures likely to remain a drag on private consumption despite moderating inflation.
• On the fiscal front, government spending and public investment will make limited contributions to headline growth in 2024 as the government continues to prioritise fiscal consolidation in the short term.
• Risks to the growth forecasts are tilted to the downside; a renewed increase in commodity prices would drive up inflationary pressures in Bermuda and further weigh on consumption and investment activity.
• Further, a sharper-than-expected slowdown in the US would also likely lead to weaker growth in Bermuda due to its significance for the key tourism sector. More generally, Bermuda’s small size, narrow export base, and over-reliance on financial services and tourism leave it vulnerable to external shocks.

(Source: Fitch Solutions)

• Britain's new government took a first step on Tuesday to boost public and private investment to modernise the economy, placing a National Wealth Fund to sit atop the existing state-owned British Business Bank and UK Infrastructure Bank.
• Prime Minister Keir Starmer and his finance minister Rachel Reeves hope to attract investment in new and growing industries as part of their push to speed up Britain's economy and meet the challenge of net zero.
• Business investment in the country has been weak since the 2016 Brexit vote, which triggered years of political instability and caused much of the country to lag behind London in terms of productivity. Labour plans to allocate an additional 7.3 billion pounds ($9.35 billion) of public money via the existing UK Infrastructure Bank so investments can be launched immediately.
• The government hopes to attract three times as much from private capital to invest in areas such as ports, hydrogen, automotive, and steel. Officials say the new fund will serve as a sovereign-backed green catalytic fund and will not resemble sovereign wealth funds operated by resource-rich countries such as Norway and Saudi Arabia. The government will bring forward new legislation to cement the fund in statute, making it a permanent institution, the finance ministry said.

(Source: Reuters)

• U.S. small-business confidence increased to a six-month high in June, but inflation worries lingered amid a rise in the share of owners planning to raise compensation for workers over the next three months. The National Federation of Independent Business (NFIB) said on Tuesday that its Small Business Optimism Index climbed 1 point to 91.5 last month, the highest level since last December.
• Nonetheless, June marked the 30th straight month that the index stayed below the 50-year average of 98 as inflation concerns remained on the radar and higher borrowing costs weighed on capital investment. A net 22.0% of businesses planned to increase compensation in the next three months, up 4 points from May. That was despite 37.0% of owners reporting job openings they could not fill, down 5 points from May.
• The NIFB, however, noted that the labour market remained tight in the construction, transportation, and retail sectors. About 16.0% of businesses reported unfilled positions for unskilled labor, an increase of 2 points from the prior month. In contrast, the share of owners reporting open vacancies for skilled workers dropped 6 points to 31.0%. Job creation plans were unchanged.
• Government data on Thursday will likely show consumer prices nudging up 0.1% in June after being unchanged in May, according to a Reuters survey of economists. The annual increase in consumer inflation is forecast to have slowed to 3.1% in June from 3.3% in May.
• Higher borrowing costs are constraining capital expenditure, with the share of small businesses reporting capital outlays in the last six months dropping 6 points to 52.0%, the lowest level since August 2022. The proportion of planning capital outlays over the next six months was unchanged at 23.0%.

(Source: Reuters)

• The Office of the Minister of Finance and Public Service has highlighted that the Government of Jamaica (GOJ) has strategically put in place a multilayered set of financial instruments to pre-finance the emergency response and recovery costs of natural disasters. Although not all storms will activate every instrument, the concept is that the nation should have the capability to utilise some instruments' resources for each storm.
• As such, the preliminary and anecdotal assessments of the damage suggest that the GOJ will need to utilize all available resources from the first two layers: the Contingency Fund and the Natural Disaster Fund, which together amount to $4.5Mn.
• The Office also emphasized the possibility that the country may need to tap into an additional layer of funding, which includes a Contingent Credit Claim with the IDB. Although the maximum available under this layer is roughly $46Bn, it will require a few days to determine precisely how much will be activated by Beryl and the amount necessary.
• “Regarding the top layer in our disaster risk framework, the path and intensity of Hurricane Beryl did not trigger Jamaica’s Catastrophe Bond, which essentially serves the purpose of providing financial protection against a Category 5 or very intense Category 4 hurricane making landfall in Jamaica.” In addition to the above, the GOJ has a $140Bn precautionary and liquidity line (“PLL”) with the IMF. The PLL is intended for countries with strong fundamentals and can be drawn in the event of liquidity problems that emerge from natural disasters or economic shocks.
• While it is too early to rule anything out, the Office does not anticipate that Hurricane Beryl has led to, or will lead to, liquidity issues for the GOJ. At the current time, the facility is unlikely to be drawn.

(Source: JIS)

• Preliminary estimates indicate that the island’s agricultural sector has suffered over $1Bn in damage due to the passage of Hurricane Beryl. Minister of Agriculture, Fisheries, and Mining, Hon. Floyd Green, disclosed during an assessment tour of farms in sections of St. Elizabeth on Saturday (July 6).
• He noted that there was damage to all crop lines. “In fact, we have seen about 85% of our banana and our plantain lines go down in Portland and St. Mary, but when you come to the southern parishes, our vegetable lines and tubers such as cassava were mainly impacted.
• We have seen a lot of damage to fruit trees – ackee, breadfruit, and unfortunately, there was significant damage to our greenhouse farmers,” he noted. Minister Green said he plans to update Parliament on Tuesday (July 9) on the extent of the damage and outline a programme of response.
• The Minister said that some 90% of greenhouse farmers across the southern parishes of Clarendon, Manchester, and St. Elizabeth were affected, with several of them losing crops and structures.
• Over the past year, the sector has struggled with high food prices due to drought conditions. There has been some relief in recent months as improved production has led to falling prices for produce and has supported a reduction in inflation. However, with the damage to the sector from Hurricane Beryl prices are likely to rise in the face of lower supplies.
• This could place upward pressure on the inflation rate in the coming months, especially since the Food division carries the most significant weight within the consumer price index (CPI).

(Sources: JIS & NCBCM  Research)