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Fed should stay independent, Trump's pick for US Treasury Secty says?

BY Reuters | ECONOMIC | 12:24 PM EST

Jan 16 (Reuters) - The Federal Reserve should stay independent, Trump's pick to be U.S. Treasury Secretary told a Senate panel on Thursday.

"I think on monetary policy decisions, the FOMC should be independent," Scott Bessent told the U.S. Senate Finance Committee, referring to the Fed's monetary policysetting panel, the Federal Open Market Committee.

"President Trump is going to make his views known," Bessent said, just as senators do when they disagree with what the Fed does with interest rates, but the notion that Trump believes he should have influence over Fed's policymaking by being in the room is "highly inaccurate."

(Reporting by Bo Erickson, David Lawder, Andrea Shalal, Ann Saphir)

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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.

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