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Fed's Kashkari: Inflation risks rise the longer Middle East war unresolved - CBS

BY Reuters | ECONOMIC | 11:02 AM EDT

By Michael S. Derby

May 3 (Reuters) - Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday the longer the U.S.-Israeli war with Iran goes on, the greater the risks of higher inflation and economic damage.

"I'm very focused" on the Iran war and its impacts and when it comes to the Strait of Hormuz closure, "the longer it's closed" the more it will lead to higher energy and fertilizer prices, Kashkari said on CBS's "Face the Nation." (Reporting by Michael S. Derby; editing by Scott Malone)

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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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