Money & WorkFact
When interest rates rise, old bonds lose value.
A bond is a loan to a government or company, with a fixed coupon. If you hold a bond paying 2% and new bonds suddenly offer 4%, nobody wants yours at full price. Its price falls until it also yields about 4% for buyers. That's why bond prices drop when central banks raise rates and climb when they cut.
Useful: If you hold a bond to maturity, you still get the full face value back.
Source: de.wikipedia.org