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Traders add to bets on Fed rate cuts after job openings fall

BY Reuters | ECONOMIC | 10/29/24 10:14 AM EDT

Oct 29 (Reuters) - Traders of futures contracts that settle to the Federal Reserve's policy rate added to bets on further reductions to U.S. short-term borrowing costs on Tuesday, after a government report showed a drop in job openings last month, in a potential sign of further cooling in the labor market.

The rate-futures contracts point to growing trader confidence in a quarter-point interest rate cut at each of the Fed's next two meetings, and further rate cuts next year, with traders reducing bets on a November pause in rate cuts to about 2%. (Reporting by Ann Saphir; editing by Jonathan Oatis)

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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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