(Bloomberg) -- Banks, small caps, commodities and the dollar rallied after the Federal Reserve decision in what looked like a classic iteration of the reflation trade. One problem: the Treasury market didn’t play along.

The Treasuries yield curve flattened to levels last seen more than a year ago after officials showed a growing inclination to raise interest rates in 2022.

“Everything looks like it’s trading like a steeper yield curve, except the yield curve,” Neil Dutta, head of U.S. economics at Renaissance Macro Research, wrote in an email.

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