What is Bonds?
A bond is a loan from an investor to a borrower (government, corporation, or municipality). The borrower agrees to pay periodic interest (coupons) and return the face value (principal) at maturity. Categories: government bonds (US Treasuries, German Bunds, Indian G-Secs, UK Gilts), corporate bonds (investment grade vs. high yield), municipal bonds, and emerging market debt. Bond prices and yields move inversely.
Why it matters for investors
The bond market is larger than the equity market globally (~$130 trillion vs ~$110 trillion). Bond yields anchor pricing for nearly every other asset — equity valuations, real estate, currency expectations. The 10-year Treasury yield is the single most-watched number in finance. Rising yields hurt bond prices, raise mortgage and corporate borrowing costs, and pressure equity valuations.