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Traders stick to bets on 25 bps Fed rate cuts in Nov, Dec

BY Reuters | ECONOMIC | 10/31/24 08:44 AM EDT

Oct 31 (Reuters) - Traders of short-term interest-rate futures on Thursday stuck to bets the Federal Reserve will cut short-term U.S. borrowing costs by a quarter-of-a-percentage point next week, and likely again by that amount in December, after economic data suggested upward price pressures continue to ease.

Inflation by the Fed's targeted measure, the year-over-year increase in the personal consumption expenditures index, was 2.1% in September, down from an upwardly revised 2.3% in August, a Commerce Department report showed. The Fed aims at 2% inflation. (Reporting by Ann Saphir Editing by Christina Fincher)

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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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