I'm hearing from multiple sources that some mail to outlook.com / live.com / hotmail.com recipients is bouncing unexpectedly today. Errors include dropped connections and "554 Transaction failed" bounces.
Microsoft is aware of the issue and is working on it.
Don't trust those bounces until things are fixed; I see mail to legitimate hotmail.com subscribers on my own mailing lists getting rejected unexpectedly.
(Update: As of approximately 2pm US Central time on Thursday, February 18th, Microsoft is reporting that the issue is resolved.)