Even though interest rates have nowhere to go but up, they are going down
What is going on?
Interest rates are near historical lows. But, as the economy becomes shaky, there is flight to quality; Investors sell risky assets (stocks, corporate bonds) and buy less risky assets (government bonds). So prices of government bonds go up, and interest rates fall even further.
Now think about it: if it was really the case that bond returns could only increase, it would have been a sure bet. Of course there are no sure bets. So there is always a risk that the market would turn in the opposite direction. And this is what is now happening.
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