Interest rates and bond prices have an inverse relationship. When interest rates rise, bond prices typically fall, and when interest rates decrease, bond prices generally increase. Existing bonds pay a fixed interest (coupon rate). If new bonds are issued at higher interest rates (due to a rise in the general interest rate environment), then the older, lower-yielding bonds become less attractive, causing their prices to fall. Conversely, if new bonds are issued at lower interest rates, the older, higher-yielding bonds become more attractive, leading their prices to rise.