JPMorgan global head of research Joyce Chang, in an interview with CNBC, said, "We see that services inflation globally is still well above pre-pandemic levels, so we are looking at 3% for core CPI, but I think something that was really underestimated in the US was the immigration story. The US population is almost 6 million higher than it was two years ago, and that explains a large part of the increase in consumption, especially when you also see very low unemployment figures."
Chang noted that upward pressure on wages and housing costs, as well as energy prices rising again this year, show that the Fed is "not out of the woods yet" on inflation.
TOUCHED ON HAITI
Immigration, and border crossings in particular, are among the hottest topics ahead of the presidential election to be held in November. Chang suggested that other events, especially the situation emerging in Haiti, could make the issue even worse.
However, arguing that immigration is a "good thing" in terms of its net impact on the economy, Chang said, "As far as we can see, the revenues generated exceed the expenses. This is not just in the US; when you look at Europe, it is also a political issue, probably the number one issue right now, but when you look at unemployment figures and the strength of consumption, we think immigration is a big part of that."
News Source: 12punto
