Bond market

A bond is like an IOU. It is when a person or company (the issuer) borrows money from a lot of people or companies, who become the bondholders. The issuer promises to pay the bondholders a certain amount of money (interest rate) at a certain time in the future and to pay back the money they borrowed at an agreed upon date (maturity date). The bond market is where people or companies buy and sell bonds. People or companies who need money to do something, like build a bridge or a school, will issue bonds to raise the money they need. The people or companies that buy the bonds (bondholders) get their money back plus interest when the bond matures. So when you buy a bond, you are essentially giving a loan to the issuer, who pays you back with interest. Bond markets are important because they allow governments and other entities to borrow money from a lot of people or companies at once.