Inflation part of Fed rate hike test likely met in coming meetings: Powell

BY Reuters | ECONOMIC | 11/30/21 01:04 PM EST

(Reuters) - U.S. Federal Reserve Chair Jerome Powell on Tuesday said that in coming months, the economy probably will have cleared the bar the Fed has set for raising interest rates as far as inflation goes, though it would still need to see full employment before it would commence liftoff.

"I would say, this is a decision for the committee to make, but I think the committee, I think in coming meetings we will wind up saying that those inflation conditions have been met," Powell told the Senate Banking Committee. The Fed has said it will not raise rates until the economy has reached full employment and inflation is at 2% and looks likely to exceed that level moderately for some time.

(Reporting By Ann Saphir; 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.