The 10-year Treasury yield soared Tuesday as the Fed lifted a key rate for the 14th consecutive time and strongly suggested there is another increase on the horizon.
The Federal Open Market Committee announced today it decided to raise the federal funds rate by 25 basis points to 4.75%, reflecting an uninterrupted climb since June 2004.
"Inflation expectations remain contained," the Fed said. "Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.
"The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance."
In response to the news of a continued rate tightening cycle, the 10-year Treasury-note's yield jumped 8 basis points for the day to 4.78%. The 10-year's price closed down 0.63 to 97.75.