The AI (ChatGPT) Stock Investing Handbook: Relationship Between Bond Prices and Interest Rates

Here is the response from ChatGPT for the prompt relationship between interest rates and bond prices entered on January 12, 2023.

Bond prices and interest rates have an inverse relationship. When interest rates rise, bond prices fall, and when interest rates fall, bond prices rise. This is because as interest rates increase, the fixed interest payments on a bond become less attractive, making the bond less valuable. Conversely, when interest rates decrease, the fixed interest payments become more attractive, making the bond more valuable. This relationship is important for investors to understand when buying and selling bonds in the bond market.