Why bond prices and interest rates always move in opposite directions?

Bond prices and interest rates move in opposite directions due to the fixed nature of bond payments. When interest rates rise, new bonds are issued with higher yields, making existing bonds with lower yields less attractive, which drives their prices down. Conversely, when interest rates fall, existing bonds with higher fixed interest payments become more valuable, leading to an increase in their prices. This inverse relationship ensures that investors seek the best returns in a changing interest rate environment.