Certainly bonds face interest rate risk, but they are also subject to buying and selling pressure. In our current environment, the stock market has shown greater instability. When the stock market becomes too risky, investors buy treasury bonds which are considered risk free. Buying pressure raises the selling price of bonds even if interest rates remain unchanged. Investors are willing to accept a lower yield based on the almost certain risk of losing money in the stock market. In this case, a smaller yield on a treasury bond is preferable to taking a loss on stocks. Likewise, when stocks look safe, selling pressure drives the bond price dowwn. In this case bond holders are willing to sell at a lowwer price because they believe they can get a larger return by moving back into stocks.