Bond prices and the FedBecause the Federal Reserve is the monetary authority of the world’s largest economy, its policy decisions have global repercussions. For example, when the Fed cuts interest rates, the demand for 10-year US Treasury Notes increases, as bonds with a coupon rate above the general interest rate attract investors.The assets of institutional investors with significant holdings of Treasury notes, such as pension funds, mutual funds, ETFs, investment banks, and trusts, will appreciate when the prices of the notes and other bonds rise.