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Fed's independence has global importance, Williams says

BY Reuters | ECONOMIC | 11/06/25 12:35 PM EST

(Reuters) -The independence of the Federal Reserve is "incredibly important" not just for the U.S. economy but also for the global economy because it is what allows the U.S. central bank to control inflation without regard to short-term political consequences, New York Fed President John Williams said on Thursday.

"Where central banks have lost their independence (this) has had horrible consequences in terms of price stability, economic stability," he said at an event at Goethe University in Frankfurt, Germany. "The evidence is pretty very compelling that independent central banks have been able to make tough decisions and unpopular decisions in the short run that pay off in the long run, especially around price stability."

(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.

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