Bond Market Statistics (2026)

The US bond market is the largest in the world, at about $61.2 trillion outstanding at the end of 2025, or roughly 38.1% of the $160.7 trillion global fixed-income market, which is about 2.0 times the next-largest market, the EU (see the chart and table below). Its global share slipped from 40.0% in 2024 as EU and Chinese debt grew faster.

Treasuries are the single largest slice at about $31.1 trillion in Q2 2026, followed by mortgage-backed securities (over $10 trillion), corporate bonds (about $12.1 trillion), and municipals (about $4.5 trillion). Agency debt ($2.2 trillion), asset-backed securities, and commercial paper ($1.4 trillion) round out the rest.

Globally, fixed income still edged out equities in 2025, but only just: SIFMA put global bonds at about $160.7 trillion against $157.8 trillion of global stock-market value, after equities rose 18.9% in the year. In the US the order is reversed: listed NYSE and Nasdaq companies were worth about $68.9 trillion at the end of 2025, above the $61.2 trillion bond market.

That is because bonds are the world's dominant financing tool. Governments borrow to fund deficits and infrastructure, and companies issue debt to expand, refinance, and fund operations, so the pile of outstanding debt tends to run ahead of equity value.

Treasuries are the backbone of the bond market and the benchmark for global rates. SIFMA counted about $31.1 trillion of marketable Treasuries outstanding in Q2 2026, up 8.5% year over year, the fastest-growing major sector. Total US public debt hit $40.4 trillion on October 15, 2026, climbing about $6.7 billion a day over the prior year.

Not all of that debt is marketable Treasuries. Of the $40.4 trillion, roughly $32.5 trillion (80.6%) is held by the public and about $7.9 trillion (19.4%) is intragovernmental, owed to trust funds like Social Security. The weighted-average interest rate on interest-bearing debt was 3.53% in September 2026, up from 3.49% in August (US Treasury).

Ownership of the debt is mostly domestic. American mutual funds, pension funds, insurers, banks, and the Federal Reserve together hold well over 70% of publicly held debt (see the table below). The Fed alone carried about $4.5 trillion, down from a $5.7 trillion peak, and US mutual funds held roughly $4.5 trillion (about 12.4%).

Trust funds account for the intragovernmental share, about $7.7 trillion, with the Social Security (OASI) fund the largest single holder at around $2.6 trillion. Banks held about $1.9 trillion (5.1%), state and local governments about $1.7 trillion (4.6%), and pension funds around $1.0 trillion (2.6%).

Foreign investors held about $9.33 trillion of Treasuries in August 2026, roughly 29% of publicly held debt. Japan is still the largest at about $1.07 trillion, but the UK (about $1.01 trillion) has nearly caught up, followed by China (about $0.59 trillion), Belgium (about $0.49 trillion), and Luxembourg (about $0.45 trillion), per the Treasury's TIC data (see the table below).

China's holdings keep shrinking, down from about $695 billion in January 2026 to $591 billion in August. About 40.2% of foreign holdings (roughly $3.76 trillion) sit with official government sources like central banks, and the remaining 59.8% (about $5.58 trillion) with private investors.

Higher rates and a bigger debt pile have pushed federal interest costs to records. The Treasury's Monthly Treasury Statement shows net interest outlays of about $1.05 trillion in fiscal 2026 (the year to September 30), up 8.4% from $970 billion in fiscal 2025 and the first fiscal year above $1 trillion (US Treasury).

As a share of the economy, interest cost about 3.3% of GDP in fiscal 2025, eclipsing the prior record set in 1991. It has climbed from just 1.6% of GDP in 2021 to 3.2% in 2025, and CBO projects it keeps rising toward 4.6% by 2036 as low-rate debt rolls into higher yields.

Corporate bonds are the third-largest sector at about $12.1 trillion outstanding, up 4.2% year over year in Q2 2026. Investment-grade debt alone tops $7 trillion in par value, making it the largest single rated debt sub-asset class in the world, with high-yield adding hundreds of billions more.

Credit spreads were tight through the period. Investment-grade spreads sat around 90-100 basis points and high-yield around 330-350 basis points in 2026, with high-yield well below its 20-year average option-adjusted spread of about 4.9%. Financials led 2024 issuance at 58.3% of the total, then energy and power (12.8%).

The municipal market, where states and localities borrow, was about $4.5 trillion outstanding in Q2 2026, with an average credit rating of AA-, on par with the federal government. It is unusually fragmented: roughly 61,000 issuers, about eight times the number of US corporate issuers.

Issuance surged in 2025. Tax-exempt new-issue supply hit about $256 billion in the first half alone, up 16% year over year and 49% above the five-year average, and full-year 2025 long-term muni issuance reached $587.3 billion, up 14.3%. Munis appeal to higher-bracket investors because their interest is usually exempt from federal (and sometimes state) tax.

Mortgage-backed securities (MBS) are the second-largest sector, over $10 trillion outstanding, and turn pools of home loans into tradable bonds, most of them backed by agencies like Fannie Mae, Freddie Mac, and Ginnie Mae. They are a core holding in broad bond funds and a big part of the Bloomberg US Aggregate.

Asset-backed securities (ABS), backed by auto loans, credit-card receivables, and similar cash flows, add roughly $1.9 trillion, and federal agency debt about $2.2 trillion. Together with money markets (about $1.4 trillion of commercial paper), these securitized and short-term sectors fill out the market beyond Treasuries, corporates, and munis.

After years of an inverted curve, the Treasury yield curve turned normal again in 2026. On October 16 the 3-month bill yielded 4.26%, the 2-year 4.74%, the 10-year 5.09%, and the 30-year 5.43%, leaving the closely watched 10-year-minus-2-year spread positive at about 35 basis points (see the table below).

An upward-sloping curve, where longer bonds pay more than shorter ones, is the historical norm and is often read as a sign of a healthier growth outlook. The prior inversion, where short rates topped long ones, had persisted through much of the Fed's tightening cycle.

Yields have swung dramatically this decade. The 10-year Treasury started 2021 near a record-low 1.08%, then more than quadrupled as the Fed fought inflation, reaching 4.63% at the start of 2025. It opened 2026 at 4.19%, fell to 3.97% in late February, then climbed above 5% in the autumn, touching 5.31% on October 5, its highest close of the year (see the chart below).

That repricing is the whole story of the bond market's recent volatility. When yields rise, existing bond prices fall, which is why 2022 was so painful, and when they stabilize at higher levels, new buyers finally earn meaningful income again after a decade of near-zero rates.

The Bloomberg US Aggregate, the standard benchmark for the US investment-grade bond market, returned about 7.1% in 2025, its best year since 2020 (see the chart and table below). That capped a recovery from 2022's -13.0%, the worst calendar year in the index's history.

The 2022 loss was historic: bonds normally cushion stock declines, but that year both fell together as inflation forced the sharpest rate hikes in decades. The rebound since, positive in 2023, 2024, and 2025, shows how higher starting yields have restored bonds' role as an income-paying anchor.

The market is not just large, it is busy. Long-term US fixed-income issuance rose 26.0% in 2024 to about $10.4 trillion and another 9.7% in 2025 to about $11.5 trillion, led by $4.8 trillion of Treasuries, $2.2 trillion of corporates, and $1.9 trillion of MBS (see the table below).

Trading is deep too. Treasuries alone averaged about $1.06 trillion of trading a day in 2025, up 15.3%, and total US fixed-income issuance ran about $9.5 trillion through September 2026, up 10.4% year over year, which reflects both heavy government borrowing and active corporate refinancing at higher rates.

For the first time in years, bonds pay real income. With the 10-year near 5.09% and investment-grade corporates yielding more, a diversified bond allocation can generate meaningful cash flow without stock-level risk, which is why bond fund assets grew about 21% in 2025 as investors returned to the asset class.

The practical takeaway is that bonds are back to doing their traditional job: income plus ballast. A simple broad-market bond fund tracking the Bloomberg US Aggregate gives you exposure to Treasuries, MBS, and corporates in one holding. As always, higher yield means higher credit or interest-rate risk, so match the bonds to your time horizon rather than chasing the top number.