The interest rate in the bond market is an integral part of the market interest rate. Therefore, after the central bank raises interest rates, bond interest rates are likely to fluctuate. The greater the rate hike, the greater the increase in bond interest rates may be.
People who have a certain understanding of bonds should know that the price of bonds is contrary to the trend of bond yields, that is, when bond interest rates rise, bond prices will fall. If the bond interest rate suddenly rises, then the bond price may also suddenly fall.
Because the coupon interest of bonds is fixed, no matter how the bond price changes, the coupon interest will not change, so only when the bond price is relatively low, can the interest of buying bonds with the same amount of funds be more, that is, the interest rate will rise when the bond price falls, and the bond price will inevitably fall when the interest rate rises.
If the central bank raises interest rates sharply, it may lead to a sudden increase in bond interest rates and a decline in bond prices.