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Fund Spy

Is the Bond Market Crashing?

The data don't support that severe a conclusion.

The Federal Reserve’s Federal Open Market Committee met on Dec. 13 and 14, with bond markets fully expecting the group to raise short-term interest rates by 0.25% to a targeted range of 0.50% to 0.75%, and that's exactly what it did.

The committee also signaled, however, that it anticipated raising that target three times in 2017, a more aggressive pace than many observers had been expecting. The bond market reacted by driving up near-term Treasury yields--the widely followed two-year maturity spiked to its highest yield in several years--but, while longer-dated yields bumped around a bit, they ultimately moved little on Wednesday.