NY Fed's Williams: Emergency lending programs could be started if needed- WSJ

BY Reuters | ECONOMIC | 11/24/20 12:41 PM EST

Nov 24 (Reuters) - The emergency lending facilities set up by the Federal Reserve to stabilize markets in the spring were successful and could be restarted later if needed after they expire at year end, New York Federal Reserve Bank President John Williams said Tuesday.

"They have played and continue to play an important backstop role, but right now I think financial conditions are quite favorable," Williams said during a virtual interview with the Wall Street Journal. "If we were in a situation where there was extreme volatility or concerns in those markets, we could deploy the appropriate tools." (Reporting by Jonnelle Marte Editing by Chizu Nomiyama)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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