What rising rates do to bond prices

Bond prices and interest rates move in opposite directions. The Fed raised rates in September and markets price another possible hike in December, so bond investors are focused on this.

Price vs yield

When new bonds pay higher yields, older bonds with lower coupons become less attractive, so their prices fall. If you hold to maturity, you still get your principal back, assuming the issuer pays.

Duration

Duration estimates a bond's sensitivity to rate changes. A fund with a duration of 6 years would be expected to lose about 6% if rates rise by 1 percentage point, and gain about 6% if they fall by 1 point.

Short vs long

Short-term bonds move less when rates change. Long-term bonds move more, and offer higher yields to compensate.

Bond funds vs individual bonds

A fund has no maturity date, so its price fluctuates indefinitely, but it continually reinvests at newer, higher yields. An individual bond has a maturity date, which makes the result more predictable if held.

Match duration to when you need the money.

Educational content, not investment advice. Figures as reported on November 9, 2026; check primary sources before acting.