Today didn't add much to the bigger picture.  With the Fed hike so well telegraphed and the weakness over the previous 3 days, we may well have assumed a bit of defensiveness in bond markets heading into the Fed Announcement.  With today's rally bringing us right back to the 21-day moving average (something I've been pointing out as the bond market's pre-Fed glide path), we're essentially right where we have been since mid November.

Cruising sideways-to-slightly-lower with a 10yr yield in the 2.2's isn't the worst place to be, but it's not necessarily where we will be going forward.  The calendar is the wild card as the holidays arrive in full force tomorrow afternoon.  Bottom line: yes we rallied nicely after Fed day, but this is just a return to the mid-point and not necessarily an indication that the Fed hike will instantly kick-off a paradoxical rate rally. 

Today's data fell on deaf ears as traders were too busy watching tradeflows.  Jobless Claims were slightly stronger (271k vs 275k) and Philly Fed was much weaker (-5.9 vs 1.5).  The Fed conducted its first open market operations at the new, higher rate, and the level of participation was barely changed.  But there again, there could be 'year-end effects' in play here (financial firms that trade with the Fed have less flexibility and like to keep more assets on their own balance sheets), so we'll have to wait and see how things shake out in January before getting too excited.