Treasuries Were Especially Ugly Today

Given the poor housing numbers that came out today, you would think that treasuries might have rallied or at least stayed the same, instead, prices dropped big time. (The reasoning behind treasuries rallying on a day house data underperforms is because many believe, including myself, that the Fed is specifically trying to deflate the housing bubble by raising interest rates and won't stop raising rates until it is succesful. Today's housing data would suggest that the Fed plan is working and therefore furture interest rate increases will not be needed as much.) However, according to this wire report;

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NEW YORK (Dow Jones)--U.S. Treasury prices slumped Wednesday, rocked by a
poorly received two-year note sale amid investor concern over next week's
meeting of the Federal Reserve and forthcoming supply in February.
In late trade the 10-year note was yielding around 4.48%, up from a session
low of 4.41%. The maturity broke the shackles of the 4.32%-4.46% range that
had previously sufficed for January. Banks and hedge funds dominated selling
flows amid hefty volumes said traders.
Treasurys opened for New York trading under pressure and that steadily
intensified, receiving a fresh bearish infusion when dealers were left holding
much of the $22 billion two-year notes sold by Treasury.