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Edited on Thu Sep-22-11 12:02 AM by A HERETIC I AM
"As interest rates fall you'll get less interest income but at least the value of your bonds goes up."
That ONLY applies to Zero Coupon bonds and in that case, it isn't interest which goes down but Yield.
If you own any US Treasury of longer than 1 year maturity, you own a bond that pays a coupon, and that DOES NOT CHANGE from the date you bought the bond.
If you already own the bond, nothing as far as your income will change.
If you buy the bonds in the future, you will get the coupon rate applicable to the specific series which you purchase.
Entirely too many people confuse yield with interest.
They are two distinctly different things.
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