Bond prices refer to the current market value or price of a bond. A bond is essentially a loan made by an investor to a borrower (usually a government, corporation or municipality), in which the investor loans money for a specified period at a fixed interest rate. Bond prices fluctuate based on various factors such as changes in market interest rates, creditworthiness of the issuer and general economic conditions. When bond prices rise, it means that investors are willing to pay more for the bond, indicating higher demand. Conversely, when bond prices fall, it indicates lower demand and a decrease in value.