Small font size A Larger text size A Largest text size A

Fed's Schmid says choice is between patience and rate hikes to tamp down inflation

BY Reuters | ECONOMIC | 02:10 PM EDT

By Howard Schneider

WASHINGTON, June 4 (Reuters) - Kansas City Fed president Jeffrey Schmid said Thursday that the U.S. central bank's choice now is between being patient and holding interest rates steady or rate hikes to tamp down inflation that has been years above target.

"The big question now is do we stay patient?" Schmid said on Thursday at an economic forum in Oklahoma. "Our inflation numbers have probably crept up into the three and a half percent range, which nobody likes. Is it temporary...or do we act? Do we say, okay, now it's time to raise rates a quarter or two and see if we can't tamp this thing down."

(Reporting by Howard Schneider)

More Fixed Income News

Aussie home prices set for weakest growth in four years as rates bite BY Reuters |ECONOMIC 04:04 PM EDT
Sector Update: Financial Stocks Gain Late Afternoon BY MT Newswires |TREASURY 03:56 PM EDT
Texas resumes enforcing fossil fuel 'boycotter' law after appeals court action BY SourceMedia Bond Buyer |MUNICIPAL 03:39 PM EDT
PREPA bondholders appeal order blocking receiver BY SourceMedia Bond Buyer |MUNICIPAL 03:38 PM EDT

All Fixed Income News

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.

fir_news_article