Afsaneh Beschloss: Where Is Inflation Heading? | SALT Talks #264 | Summary and Q&A

TL;DR

Afsaneh Beschloss discusses the state of the markets, the growth of ESG investing, emerging markets, carbon emissions, and the future of energy. She emphasizes the need for financial inclusion, higher wages, and investments in youth and entrepreneurship.

Key Insights

• ⛓️ Supply chain issues caused by COVID-19 are expected to peak inflation around 7%, but improvements in the supply chain and a focus on reducing emissions will likely result in a decrease to around 3-4% within a year.
• 🤨 ESG investing is still growing and has outperformed traditional investments, driving interest from investors and raising awareness about the financial benefits of sustainable investing.
• 🌏 Emerging markets, such as East and South Asia, offer potential investment opportunities, particularly in fintech and climate-oriented sectors.
• 🖐️ Global climate conferences have played a crucial role in raising awareness about climate change, leading to increased public engagement and investment in clean energy.
• 🥺 The renewable energy sector has experienced significant advancements, with solar and wind energy becoming more affordable and accessible, leading to increased adoption and potential for significant growth.
• 🥅 Companies can achieve net-zero commitments while maintaining profitability by transitioning to cleaner energy sources and investing in sustainable practices. Transparency in reporting and investment in technology are essential for achieving sustainability goals.
• ✋ The withdrawal of liquidity injected into the economy may have uncertain consequences, but a focus on equitable wealth distribution and increased consumption through higher wages can contribute to a more positive economic outlook.

Transcript

hello everyone and welcome back to salt talks my name is john darcy i'm the managing director of salt which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy salt talks are a digital interview series with leading investors creators and thinkers and our goal on these salt talks i... Read More

Questions & Answers

Q: How will supply chain issues related to COVID-19 impact inflation in the short and long term?

Afsaneh Beschloss expects inflation to peak around 7% due to supply chain problems but believes it will decrease to around 3-4% within a year. She attributes these issues to COVID-19 and highlights the efforts to address them by President Biden's appointment of a port advisor.

Q: Is the enthusiasm for ESG investing still growing, and how has it performed compared to traditional investments?

Beschloss states that the enthusiasm for ESG investing is still increasing, as more investors realize the financial benefits of integrating environmental, social, and governance factors into their portfolios. She mentions that ESG investments have outperformed traditional investments in recent years, according to one-year, three-year, and five-year performance data.

Q: What are the potential areas of interest in emerging markets, and how have they been affected by the COVID-19 crisis?

Beschloss identifies East Asia and South Asia (excluding China) as potentially interesting areas in emerging markets. She acknowledges that emerging markets were not as resilient as expected during the COVID-19 crisis due to limited access to vaccines, but she sees potential for growth in specific sectors like fintech and climate-oriented investments.

Q: How successful were the recent climate conferences, and what impact will they have on the future of climate change policies?

While Afsaneh Beschloss acknowledges that the recent COP26 climate conference had its limitations, she highlights the positive aspect of raising awareness about climate change and increasing public engagement. She believes that these conferences have shifted the perception of climate change from a specialist topic to a broader concern, influencing consumer choices and driving investment in clean energy.

Q: How has the use of renewable energy evolved, and what are the future prospects for the energy sector?

Beschloss discusses the significant advancements in renewable energy technology, particularly in solar and wind energy, which have become more affordable and accessible. She predicts that renewable energy will be the source of the majority of electricity generation, with emerging markets leading the growth. She also emphasizes the importance of investing in clean energy and reducing carbon emissions.

Q: How can companies achieve their net-zero commitments while maintaining profitability?

Beschloss believes that companies can achieve their net-zero commitments by adopting cleaner energy sources and reducing emissions. She highlights the decreasing cost of renewable energy, making it financially viable for companies. She also emphasizes the need for transparency in reporting carbon emissions and encourages companies to invest in technology and research to improve sustainability practices.

Q: What concerns are there regarding the withdrawal of liquidity and its impact on the economy?

Beschloss expresses concern about the potential impact of withdrawing the massive liquidity injected into the economy by central banks over the past 18 months. She acknowledges that the consequences are uncertain and could have significant implications for the economy. However, she remains optimistic due to the potential for a more equitable distribution of wealth and increased consumption resulting from higher wages.

Q: How can policymakers address income inequality and promote economic growth?

Beschloss suggests policies to address income inequality, including modernizing financial systems to promote financial inclusion, ensuring living wages for all, and investing in youth and entrepreneurship. She emphasizes the importance of supporting diverse populations and providing access to meaningful economic opportunities for sustainable economic growth.

Summary & Key Takeaways

• Afsaneh Beschloss predicts that inflation will peak around 7% due to supply chain issues caused by COVID-19, but will likely decrease to around 3-4% within a year.

• She believes that the enthusiasm for ESG investing is still growing and that it has outperformed traditional investments in recent years.

• Beschloss sees potential in emerging markets, particularly in East and South Asia, as well as specific sectors like fintech and climate-oriented investments.

• She highlights the importance of global climate conferences in raising awareness about climate change, but acknowledges the need for more action-oriented policies.

• Beschloss discusses the growth of renewable energy and the need for modernizing financial infrastructure to promote financial inclusion and reduce inequality.

• She expresses optimism about the potential for positive change in the economy, particularly in relation to improved wage distribution and increased investment in youth and entrepreneurship.