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Fed's Williams tells Yahoo monetary policy is in 'right place' amid inflation risks

BY Reuters | ECONOMIC | 10:27 AM EDT

By Michael S. Derby

NEW YORK, June 3 (Reuters) - Federal Reserve Bank of New York President John Williams reiterated on Wednesday that he does not believe the U.S. central bank needs to change the setting of short-term interest rates despite upside inflation risks tied to the Middle East war and other forces.

"Monetary policy, I think, is exactly in the right place," Williams said in an interview on Yahoo Finance. "I don't see any need to raise or lower interest rates right now" and "I don't see an obvious argument to that we should change interest rates, but I also don't see an obvious kind of direction where we would go in the future."

(Reporting by Michael S. Derby)

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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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