As widely anticipated, earlier this week the Federal Reserve increased its target for short-term interest rates by 0.25% (from 0.25% to 0.50%). The move was well telegraphed – prior to Wednesday’s meeting, the market (Fed Funds futures) were pricing in a near 100% chance the rate hike would happen. What remains uncertain though is the Fed’s path for rate hikes in 2017. What does all of this mean for bonds? After all, when interest rates go up, bond prices go down.