For example, if the benchmark interest rate of 65438+ 10 is 5%, then the country will issue government bonds on this basis, and the 1 year government bonds may be 5.5%.

In February, cut interest rates. At this time, for example, the benchmark interest rate is 4%. At this time, the national bonds issued by the state or bonds issued by other institutions will be priced based on the benchmark interest rate, and the 1 year national bonds may be 4.5%.

Then the yield to maturity of new debt became lower, the interest rate of old debt was still 5.5%, and the old debt appreciated.

It is good for bonds, and the good part is the part of bonds issued and traded before interest rate cuts. Will be grateful.

Not to mention complicated definitions and theories. The above is a very simple example.

The actual situation is more complicated.