Bond Market Statistics (2026)

The US bond market is the largest in the world, at about $58.2 trillion outstanding, or roughly 40.1% of the $145.1 trillion global fixed-income market, which is about 2.1 times the next-largest market, the EU (see the chart and table below). It is also bigger than the US stock market.

Treasuries are the single largest slice at about $30.3 trillion, followed by mortgage-backed securities (over $10 trillion), corporate bonds (about $11.5 trillion), and municipals (about $4.2 trillion). Agency debt, asset-backed securities, and money markets round out the rest.

Globally, fixed income outstripped equities in 2024: SIFMA put global bonds at about $145.1 trillion against roughly $126.7 trillion of global stock-market value. In the US the same pattern holds, with the bond market larger than the stock 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 $30.3 trillion of Treasuries outstanding in Q4 2025, up 7.0% year over year, the fastest-growing major sector. Total US public debt hit $39.4 trillion by July 2026, climbing about $6.7 billion a day.

Not all of that debt is marketable Treasuries. Of the $39.4 trillion, roughly $31.7 trillion (80.4%) is held by the public and about $7.7 trillion (19.6%) is intragovernmental, owed to trust funds like Social Security. The weighted-average interest rate on the debt was about 3.41% in June 2026 (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 $9.2 trillion of Treasuries as of late 2025, roughly 31% of publicly held debt. Japan is the largest at about $1.2 trillion, followed by the UK (about $0.9 trillion), China (about $0.7 trillion), and Luxembourg (about $0.4 trillion), per the Treasury's TIC data (see the table below).

China's share has been shrinking in both dollar terms and as a proportion of foreign holdings. About 41.9% of foreign holdings (roughly $3.9 trillion) sit with official government sources like central banks, and the remaining 58.1% (about $5.4 trillion) with private investors.

Higher rates and a bigger debt pile have pushed federal interest costs to records. Net interest exceeded $1 trillion for the first time in 2025, and the CBO projects it will reach about $1.0 trillion in 2026, up roughly 7% (CRFB).

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 $11.5 trillion outstanding, up 3.5% year over year in Q4 2025. 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 $4.2 trillion outstanding, 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, with full-year estimates running well above prior years. 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 $2.0 trillion. Together with money markets (around $1.6 trillion), 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. In mid-July the 2-year yielded 4.18%, the 10-year 4.55%, and the 30-year 5.06%, leaving the closely watched 10-year-minus-2-year spread positive at about 37 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 before easing slightly (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, led by $4.7 trillion of Treasuries, $2.0 trillion of corporates, and $1.6 trillion of MBS (see the table below).

Trading is deep too. Treasuries alone averaged more than $900 billion of trading a day in 2024, and total US fixed-income issuance ran about $6.4 trillion in the first half of 2026, up 11.7% year over year, reflecting 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 4.55% 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.