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Fed seen likely on policy hold until Sept, but traders add to bets on July cut

BY Reuters | ECONOMIC | 02/13/25 08:54 AM EST

Feb 13 (Reuters) - Traders on Thursday placed rising but still shy of even odds the Federal Reserve will cut its policy rate in July instead of waiting until September, after data showed wholesale prices rose faster than projected in January and jobless claims declined.

Before the reports traders of futures contracts that settle to the federal funds rate priced close to a 60% chance that the Fed would still be on hold in July at the current policy rate range of 4.25%-4.5%; after the data that chance fell to about 52%. (Reporting by 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.

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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