At this time in 2016, US monetary policymakers were reeling from the reaction in financial markets wrought by their quarter-point rate hike at their December meeting. This was not the plan. Some tightening in 2015 had been tipped for what seemed like forever, so there was no element of surprise in the Federal Open Market Committee (FOMC) slipping into action just before the year closed. After the move though, the dollar appreciated sharply, equity prices tanked, and debt spreads widened. Only a significant decline in Treasury yields—out of place after the tightening by the US Federal Reserve (Fed)—prevented financial conditions (the key elements of which are shown in the chart below) from choking off economic expansion. The net effect was a full frontal assault on many fixed-income portfolios.