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Does the Fed Raising Interest Rates Affect Corporate Bonds and Bond Funds?

Hello!

I’m still fairly new to investing, and have recently been researching bonds and bond funds, and the factors that go into investing in them. I know the concept that when interest rates rise, bond prices fall. I also know that the Federal interest rate is currently super low, therefore the only place it can really make meaningful moves is to be raised.

My question is: does the Fed raising the interest rates on government bonds impact corporate bonds and bond funds directly? Or do they move more independently from the government issued bonds? I.e. if I were to invest in a corporate bond fund today, and the Fed increased the interest rates tomorrow, would my bonds immediately lose value?

Feel free to also clarify any misunderstandings I have if you notice any based on the above.

Thanks!

Does the Fed Raising Interest Rates Affect Corporate Bonds and Bond Funds? – RobinHood – Reddit Feed


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