US Treasuries fell and yields jumped on Tuesday after the Federal Reserve raised borrowing rates to 4.75 per cent as expected and continued to suggest further rate hikes “may be needed”.
The Federal Open Market Committee, at its first meeting under Ben Bernanke’s chairmanship, raised rates by 0.25 per cent for a fifteenth consecutive time. Although it modified the economic assessment in its statement, the FOMC left policy-related passages unchanged, leaving room for further rate rises.
A bad sign. A very bad sign.