NEW YORK (CNNMoney.com) - Treasury bond prices tumbled Tuesday after the Federal Reserve raised interest rates and said that more rate hikes may be needed.

The dollar, meanwhile, rose.

Quick Vote Do you believe the Federal Reserve is raising interest rates too high?   Yes   No   Have to wait and see or View results

The benchmark 10-year Treasury note fell 20/32 to 97-24/32 to yield about 4.78 percent after touching 4.79 percent earlier in the session. The last time the yield on the 10-year note reached that high was during the trading session on March 7, when it touched 4.80 percent.

The 30-year bond sank 1-2/32 to 95-9/32 to yield 4.79 percent, up from 4.70 percent late Monday. Treasury yields move inversely to prices.

The five-year note fell 13/32 to yield 4.78 percent, while the two-year note lost 5/32 to yield 4.79 percent.

The central bank wrapped up its two-day monetary policy meeting Tuesday and raised the target for its fed funds rate, a key overnight bank lending rate, for the 15th straight time since June 2004 to 4.75 percent. (Full story.)

The quarter-percentage hike was widely expected, but the Fed also said that further rate hikes may be needed in the next few months to keep inflation and growth risks roughly balanced.

"Some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," the Fed's statement said. (Full statement.)

Treasuries had slipped in advance of the announcement and sentiment was hurt further after the Fed issued its decision in the afternoon.

The policy statement didn't depart much from the January statement, leading many to believe new chairman Ben Bernanke, who led the Fed meeting for the first time Tuesday, would keep in line with the measured pace of rate hikes the Fed embarked upon under former chief Alan Greenspan.

"There was a hope that the announcement would bring a clear signal that rate increases would come to end, but there's nothing that even hints that they're any closer," Pierre Ellis, chief economist of global fixed income at Decision Economics, told CNNMoney.com.

Economists widely expect the Fed to raise rates again when it meets in May, but they're split over the central bank's actions following that meeting.

Bonds also reacted negatively to a morning economic report that showed consumer confidence rose to its highest level in almost four years in March.

Stocks turned lower on the Fed decision and ended the session in negative territory, as investor concerns about price pressures flared.

The dollar gained against the euro and the yen. Rising interest rates generally help the dollar as they make dollar-denominated securities more attractive to foreign investors.

In currency trading, the euro bought $1.2009, down from $1.2011 late Monday, while the dollar bought ¥117.77, up from ¥116.70 the previous session.

-----------

More transparency ahead at the Fed? Click here.