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Fed's Hammack says rates likely on hold 'for quite some time' - WOSU radio

BY Reuters | ECONOMIC | 10:32 AM EDT

May 7 (Reuters) - Federal Reserve Bank of Cleveland President Beth Hammack reiterated on Thursday that risks of higher inflation in the future argued against the U.S. central bank holding on to its policy leaning toward cutting rates at some point in the future. "My outlook right now is that interest rates will be on hold for quite some time," Hammack said on an interview on the WOSU public radio station. "Based on what I see right now, I see a lot of uncertainty in the economic outlook" and "I think our statement should have a pretty neutral stance about whether the next move is down or up or just on hold for a really long period of time," she said.

Hammack dissented at the most recent Fed meeting about the ongoing inclusion of language implying the Fed's next move would be a rate cut. (Reporting by Michael S. Derby; Editing by Chizu Nomiyama)

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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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