You've got it backwards. When rates go up, bonds become more useful as an investment. When the 1-year US Treasury was yielding 0.2% earlier this year, it was

You've got it backwards. When rates go up, bonds become more useful as an investment. When the 1-year US Treasury was yielding 0.2% earlier this year, it was a bad idea to buy 1Y treasuries (and most other treasuries). Today, the 1Y is 2.87%, and suddenly a whole slew of investors just won't want to invest into shady high-risk companies anymore (Hey look, US Treasuries are yielding good values again. Lets buy those instead). The people who did buy 0.2% 1Y treasuries earlier this year (or worse, 10Y or 30Y treasuries) have lost a lot of value due to these higher interest rates. ------- Case in point: the 1Y US Bond is literally a better rate than my 15Y mortgage. It makes more sense to buy 1Y bonds than for me to pay off my mortgage right now (ignoring tax issues of course)