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Fed's Williams says demand remains robust for US government debt

BY Reuters | ECONOMIC | 05/07/26 04:31 PM EDT

NEWBURGH, New York, May 7 (Reuters) - Federal Reserve Bank of New York President John Williams said on Thursday that demand for U.S. government debt remains robust despite high levels of borrowing.

The Fed is watching the very high level of government borrowing "very carefully," Williams said in an event in Newburgh, New York. While it may be surprising, there remains "enormous" demand for U.S. government debt offerings, and "America is still seen as the strongest economy in the world" and a good place to park cash, and "it hasn't changed even with all the geopolitical issues and things like that," he said.

(Reporting by Michael S. Derby; Editing by Chris Reese)

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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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