samjuno:

Yes, I seem to have made the wrong move at the wrong time, guess I should have let my Roth CD rollover at 3.5% APY.

They just paid a dividend today, but I'm still down around 1.38%.

You would have had the same loss on the CD; it's just that your bank wouldn't have told you.  If you buy a five-year CD for $10,000 with a 3.5% rate, this is a promise to pay you $11,877 in five years.  If interest rates go up to 3.8%, the value of the CD drops to $9856 because a new CD costing $9856 would be worth $11,877 in five years.  The bank doesn't report the market value of the CD, which remains $10,000, but it won't let you withdraw the CD funds without a penalty, so it isn't really worth $10,000. 

In contrast, if your bond fund buys a five-year bond and interest rates go up by 0.3%, the value of the bond drops by 1.4%, and you see this immediately because there is a market for these bonds.  If the fund keeps the bond to maturity, it will get the returns it expected from the initial yield; the bond yield has increased because of the lower price.

A short-term bond fund is usually fine for an emergency fund, as long as you recognize that there will be occasional 1-2% losses in the short run as interest rates rise.