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Not really, since the Treasury still honors the interest of the bond. Just because someone values the purchase value lower doesn't invalid the interest rate. Yo
by ladyattis 4y ago
Not really, since the Treasury still honors the interest of the bond. Just because someone values the purchase value lower doesn't invalid the interest rate. You just lose money if you sell it.
- prottog 4y agoExactly. You're mark-to-market red on your bonds, since if you tried to sell your 2%-yielding bonds in a market where new bonds yield 4% obviously your bond will be worth less than what you bought it for; but you'll still continue to receive those coupons at 2% for the lifetime of the bond.
- rubiquity 4y agoYes you still receive your coupon. My point was that existing bonds coupons don't change.