JPMorgan research head says that immigration has been 'really underestimated' and is positively impacting the U.S. economy.

• The Federal Reserve increased its 2024 GDP growth forecast from 1.4% to 2.1% on Wednesday, indicating the economy's strength.
• Despite January and February inflation prints, the labor market has remained relatively hot, dampening hopes that price increases were fully under control.
• Joyce Chang, chair of global research at JPMorgan, stated on CNBC on Thursday that one thing that was overlooked in the U.S. was the immigration narrative.

Despite global challenges, the U.S. economy is being helped by the recent influx of immigration, according to Joyce Chang, chair of global research at.

The Federal Reserve increased its 2024 GDP growth forecast from 1.4% to 2.1% on Wednesday, indicating the economy's strength despite high interest rates aimed at controlling inflation.

Despite tighter monetary conditions, the labor market has remained hot, with unemployment remaining below 4% in February and the economy adding 275,000 jobs.

The Fed has revised its forecast for core personal consumption expenditure inflation, expecting it to be 2.6% instead of 2.4%, due to dampened hopes from January and February inflation prints.

In February, the core consumer price index, which does not include fluctuating food and energy prices, increased by 0.4% compared to the previous month. Additionally, this index rose by 3.8% year-over-year, slightly surpassing expectations.

"Despite the global phenomena, services inflation is still higher than before the pandemic, and we predict a 3% core CPI. However, the U.S. immigration story was underestimated," said Chang on CNBC's "Squawk Box Europe" on Thursday.

"The increase in consumption can be attributed to the U.S. population being approximately 6 million higher than two years ago, as well as the low unemployment rates."

The resurgence in energy prices and upward pressure on wages and housing costs indicate that the Fed may not have fully overcome inflation challenges.

The Congressional Budget Office predicts that net immigration to the U.S. will remain at 3.3 million in 2024 before dropping to 2.6 million in 2025 and 1.8 million in 2026.

The topic of immigration, specifically border crossings, is one of the most heated issues in the lead-up to the November presidential election. Chang pointed out that other events could intensify the problem, particularly the ongoing crisis in Haiti.

She maintained that immigration has a positive effect on the economy.

The revenues generated exceed expenses, making it a political issue not only in the U.S. but also in Europe, where it is currently the top issue. However, Chang believes that when looking at unemployment numbers, consumption strength, and immigration, it is a significant factor.

The U.S. economy has outperformed its peers due to its high fiscal deficit and energy independence, according to Chang. In contrast, Europe has faced challenges in reducing its dependence on Russia for energy supply.

The Congressional Budget Office predicts that the U.S. federal budget deficit will be $1.4 trillion in 2023, which is 5.3% of GDP, and will increase to 6.1% of GDP in 2024 and 2025.

"In an election year, there will likely be a significant amount of spending before September 30th, indicating that the numbers won't decrease. This is one reason why I believe higher for longer will continue to be a trend," Chang stated.

The Federal Reserve is expected to only slightly ease monetary policy, while inflationary pressures remain high due to government spending and immigration, according to JPMorgan.