That's the way it works in Bash. The reason is that it doesn't want to interrupt you mid-command.
I keep looking for another easy way to monitor a changing file or directory. It seems to me that there ought to be some command line thing, but if there is, I don't know of it.
While we're waiting for someone to point out what I missed, take a look at http://aplawrence.com/Unixart/watchdir.html
That has links for dnotify, inotify, changedfiles, watch, Gamin and fam. None of those directly do what you want, but any of them could be used to roll up something.