▁the ▁U . S . ▁Tre as ury ▁Department , ▁of ▁some ▁$ 1 9 . 8 ▁tr ill ion ▁at ▁the ▁time . ▁This ▁figure ▁is ▁likely ▁to ▁have ▁ex cluded ▁the ▁inter - g overn ment al ▁deb ts ▁such ▁as ▁those ▁held ▁by ▁the ▁Federal ▁Reserve ▁and ▁the ▁Social ▁Security ▁Trust ▁Fund . ▁ ▁Vol at ility ▁ ▁For ▁market ▁participants ▁who ▁own ▁a ▁bond , ▁collect ▁the ▁cou pon ▁and ▁hold ▁it ▁to ▁m atur ity , ▁market ▁vol at ility ▁is ▁irrelevant ; ▁principal ▁and ▁interest ▁are ▁received ▁according ▁to ▁a ▁pre - det erm ined ▁schedule . ▁ ▁But ▁participants ▁who ▁buy ▁and ▁sell ▁b onds ▁before ▁m atur ity ▁are ▁exposed ▁to ▁many ▁ris ks , ▁most ▁important ly ▁changes ▁in ▁interest ▁rates . ▁When ▁interest ▁rates ▁increase , ▁the ▁value ▁of ▁existing ▁b onds ▁falls , ▁since ▁new ▁issues ▁pay ▁a ▁higher ▁yield . ▁Like wise , ▁when ▁interest ▁rates ▁decrease , ▁the ▁value ▁of ▁existing ▁b onds ▁r ises , ▁since ▁new ▁issues ▁pay ▁a ▁lower ▁yield . ▁This ▁is ▁the ▁fundamental ▁concept ▁of ▁bond ▁market ▁vol at ility — changes ▁in ▁bond ▁prices ▁are ▁inverse ▁to ▁changes ▁in ▁interest ▁rates . ▁Fl uct u ating ▁interest ▁rates ▁are ▁part ▁of ▁a ▁country ' s ▁mon et ary ▁policy ▁and ▁bond ▁market ▁vol at ility ▁is ▁a ▁response ▁to ▁expected ▁mon et ary ▁policy ▁and ▁economic ▁changes . ▁ ▁Econom ists ' ▁views ▁of ▁economic ▁indic ators ▁versus ▁actual ▁released ▁data ▁contribute ▁to ▁market