The negative correlation between bond price and interest rate is mainly due to the theoretical value of bonds calculated by discounted cash flow method. Generally speaking, the future cash flow of bonds is predictable without default. In the calculation process of discounted cash flow method of bonds under discounted cash flow method, the cash flow of each period is divided by [the time power of the corresponding cash flow after the sum of (1+interest rate)] and then summed, that is, the theoretical value of bonds calculated with high interest rate will be low, and the interest rate will also be low. Therefore, raising interest rates will lead to a decline in bond prices.

But in fact, many times before raising interest rates, bonds will fall first because the market has the expectation of raising interest rates. The boots that really raise interest rates will land, and the bond market will not necessarily fall much.