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Fed's Hammack tells CNBC rate hikes may be needed to quell high inflation

BY Reuters | ECONOMIC | 11:06 AM EDT

June 30 (Reuters) - Federal Reserve Bank of Cleveland President Beth Hammack said Tuesday central bank interest rate hikes may still be in the cards if inflation pressures don't moderate.

"I'm going to keep an open mind" about what the Fed needs to do on interest rate policy, Hammack said in a CNBC interview. But, "if inflation continues to persist at these elevated levels and I don't see any restraint from policy, we may need to raise rates to bring that policy restraint in and to bring inflation back down," the official said.

(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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