When rates fall the value of outstanding bonds raises.
You can think about it this way:
Yesterday's bonds yield 10%.
Yesterday I bought a 10% yield bond brand new, at a 100 cents on the dollar.
Rates fall, today's bonds yield 1%. If you want to buy a bond, you can buy a new 1% yield one at 100 cents on the dollar, or you can buy my used one, which yields 10%. How is mine not more valuable than 1$?
You can think about it this way:
Yesterday's bonds yield 10%.
Yesterday I bought a 10% yield bond brand new, at a 100 cents on the dollar.
Rates fall, today's bonds yield 1%. If you want to buy a bond, you can buy a new 1% yield one at 100 cents on the dollar, or you can buy my used one, which yields 10%. How is mine not more valuable than 1$?