The bond markets' indifferent response to last Friday's statement by the U.S. Federal Reserve (Fed) that interest rates may be raised this year seems about right. By moving up the yield on the benchmark ten-year Treasury note two basis points to 2.21 percent, it looked like bond traders heaved a big and tired Friday afternoon yawn before heading out for the long Memorial Day weekend. The story, however, would have been entirely different had the Fed's message come with an increase of the federal funds rate – the only interest rate the Fed directly controls -- closer to its 0.25 percent target. But that is not what ... (full story)