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Fed's Williams energy price view driven by market pricing

BY Reuters | ECONOMIC | 06:03 PM EDT

By Michael S. Derby

NEW YORK, March 30 (Reuters) - Federal Reserve Bank of New York President John Williams said Monday his view that energy prices will retreat later this year is driven by the financial market's outlook.

Williams told reporters after a speech in Staten Island, New York, that his outlook is "kind of consistent with where markets see oil prices, but there's obviously, you know, other scenarios." He added: "We'll have to see over...coming weeks" how this plays out.

While this happens, he said, "I just have to watch the data and try to get better understanding" of what the surge in energy prices will do to the economy. (Reporting by Michael S. Derby; Editing by David Gregorio)

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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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