On Friday’s broadcast of CNBC’s “Squawk Box,” New Jersey Gov. Phil Murphy (D) called for the Federal Reserve to remain aggressive on inflation. He also noted that New Jersey, like many other states, has unspent COVID relief money along with other government spending that will hit in the future.
Murphy stated that while he is pleased by the October Consumer Price Index (CPI), “I would think, and this brings me no joy, because this is brutal at the kitchen table, but I think, if anything, the Fed continues to overcorrect. I’m on the side of aggressive behavior, because otherwise, a lot of inflation is sentiment. It’s not just the reality of the math. It’s the sentiment, and when folks wake up and realize, you know what, the Fed and all other weapons that we have are as aggressive as they are, it must be making an impact. Therefore, I believe, when I look out six or 12 months from now, I’m more optimistic than I am today. To feed that positive sentiment in the economy, I think they’ve got to be — they’ve got to take some more steps, that would be one guy’s opinion. And I don’t say that with any glee because that means more pain for all of us.”
Later, while discussing the prospects of an economic slowdown, Murphy said, “There’s a lot of liquidity on the sidelines. If you just look at our balance sheet, we’ve got a massive surplus, we’ve got a large shadow surplus, we’ve got unspent American Rescue Plan money, bipartisan infrastructure dollars to be spent over five years, other monies coming from the Inflation Reduction Act or the CHIPS Act from the summer. I don’t think our state is different than a lot of other American states.”
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