Bond Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Global Bond Market Trends and Insights

Stabilizing global inflation expectations support fixed-income allocations

Central banks have begun a coordinated easing cycle after headline inflation retreated from pandemic highs. The Federal Reserve’s deliberate pace of rate cuts is keeping nominal yields wide enough to attract investors seeking positive real returns, while the European Central Bank has trimmed its policy rate from 4.00% to 3.25% and signalled further reductions^{[1]AEW, “ECB Rate-Cut Implications for Euro Bonds,” aew.com} . Portfolio managers are therefore lengthening duration, replacing cash that now yields less than 4.3% with intermediate and long-dated investment-grade bonds that still offer coupon premia. A CPR Asset Management review calculates that developed-market policymakers have so far reversed just 20% of their pandemic-era hikes, implying additional room for curves to bull-flatten as easing progresses ^{[2]CPR Asset Management, “Monetary-Easing Cycle Review,” cpr-am.com}. As money-market yields descend, bonds regain their structural role in balanced portfolios, underpinning demand growth across the Global bond market. 

Institutional asset rebalancing toward liability-matching assets

Pension schemes and insurers are moving decisively into longer-tenor securities to align cashflows with liabilities that extend over multiple decades. Positive real yields in core sovereign and high-grade corporate curves are restoring bonds’ income-generation appeal, reducing the need to pursue riskier alternatives. Under Solvency II, European insurers also gain capital relief by holding duration-matched assets, reinforcing predictable bid support for long bonds. J.P. Morgan strategists estimate that every 25 basis-point rise in real yields incentivises approximately USD 180 billion of incremental institutional demand. The trend is likely to persist through the forecast horizon as ageing demographics intensify the search for stable income, thereby deepening liquidity in the Global bond market. 

Emerging-market local-currency bond inclusion in global indices

India’s admission to the JPMorgan Government Bond Index is expected to channel USD 100 billion of passive inflows, while enhancing secondary-market liquidity and tightening bid-ask spreads. Similar index-eligibility efforts by Indonesia and Vietnam are accelerating local market reforms, with authorities upgrading settlement infrastructure to satisfy clearing and custody standards. In April 2025, Asian local-currency bonds recorded their strongest foreign inflow in eight months, signalling durable diversification demand. As index consortiums widen coverage, more emerging issuers will gain lower funding costs, supporting overall issuance growth within the Global bond market. 

Growing adoption of ESG-labelled bonds

Although 2025 primary volumes are down 15% year on year amid geopolitical uncertainty, the medium-term pipeline remains robust. Green bonds represent 58% of all sustainable issuance, backed by the European Union’s Green Bond Standard that provides taxonomy clarity. AllianceBernstein analysis suggests the ESG-labelled universe could approach USD 6 trillion by decade-end once robust impact-measurement protocols mitigate greenwashing concerns^{[3]Environmental Finance, “ESG-Labelled Bond Market Trends 2025,” environmental-finance.com}. Emerging-market sovereigns and corporates are exploring sustainability-linked structures to finance climate-transition projects, further enlarging the Global bond market. 

Duration-extension risk from steepening yield curves

The Federal Reserve’s 2023 Treasury-market episode illustrated how a re-pricing of term premiums can shock long-duration portfolios even when policy-rate expectations remain unchanged. As quantitative-tightening persists, the absence of the Fed as a large buyer amplifies supply-driven curve steepening, exposing investors to mark-to-market losses that may exceed coupon income. Commercial real-estate debt totalling USD 1.5 trillion matures by end-2025, raising default risks if refinancing costs spike. These factors could temporarily dampen appetite for the long-end and moderate near-term growth in the Global bond market. 

Sovereign-debt sustainability concerns in frontier economies

Frontier sovereigns collectively carry USD 29 trillion in obligations, and elevated global real rates raise rollover risk. The sovereign-bank nexus heightens systemic pressures because domestic banks often hold a concentrated share of government paper. Recent protests in Kenya and Argentina underscore the social instability that can emerge when debt costs surge. Heightened risk premia may deter capital flows to lower-rated borrowers and weigh on the global bond market’s expansion pace. In some regions, fiscal tightening in response to debt distress could constrain public investment and social spending, deepening economic fragility. Additionally, credit rating downgrades may further elevate borrowing costs, creating a feedback loop that hinders market access and economic recovery. 

Segment Analysis

By Type: Treasury Bonds Anchor Stability Amid High-Yield Surge

Treasury securities comprised 45.4% of the outstanding value in 2024, making them the primary reference curve for pricing credit spreads across the Global bond market. Investors continue to use Treasuries for liquidity management, collateral, and risk-free hedging, particularly during bouts of macro uncertainty. At the other end of the spectrum, high-yield volumes increased 52.4% in the United States and 85.9% in Europe during 2024, as borrowers front-loaded refinancing ahead of an expected maturity wall. This activity lifted the high-yield segment’s 8.41% CAGR outlook. Corporate bond issuance topped USD 1 trillion in 2024, and floating-rate note demand rose sharply after the World Bank priced a USD 1.25 billion SOFR-linked bond that drew oversubscription from central-bank reserve managers. Mortgage-backed securities retained steady bid support, with Ginnie Mae printing more than USD 40 billion of gross supply in August 2024.

Momentum across these categories highlights a bifurcated landscape: safe-haven flows anchor Treasury demand while yield-seeking investors chase high-spread names. White & Case projects USD 160 billion of speculative-grade maturities over the next two years, implying sustained primary-market activity. Treasuries should nevertheless preserve their dominance because macro hedging demand remains structural. In addition, the United States faces persistent fiscal deficits that translate into regular Treasury auctions, reinforcing depth in the Global bond market. Mortgage-backed supply is likely to moderate as housing turnover slows, yet government-sponsored enterprise support keeps spreads contained. Overall, the type segmentation shows that flight-to-quality and yield-enhancement motives will coexist, underpinning aggregate growth. 

Note: Segment shares of all individual segments available upon report purchase

By Issuer: Private-Sector Acceleration Outpaces Public Dominance

Public-sector instruments accounted for 50.1% of issuance in 2024, reflecting large sovereign funding programs and ongoing quantitative-easing reinvestments by major central banks. Governments continue to rely on domestic and international markets to finance infrastructure, healthcare and energy-transition spending. Nonetheless, the private sector’s 7.62% projected CAGR points to faster proportional growth as corporates lock in favorable long-term coupons. Goldman Sachs estimates USD 1.5 trillion of US corporate issuance in 2025, with utility operators and technology firms leading the calendar. The Federal Reserve’s pivot to rate cuts encourages issuers to term-out short-dated revolvers into multi-year notes. 

Higher-quality names were able to rush USD 29 billion into the market during the opening week of 2024, signaling healthy investor appetite for spread products. European utilities and automakers are using proceeds to fund grid modernization and electric-vehicle platforms, contributing to a projected 8% uptick in investment-grade supply, according to Natixis. On the sovereign side, emerging-market funding costs have begun to ease after India’s index inclusion, but frontier names still face strained fiscal positions. Consequently, private-sector issuance will likely shoulder a larger share of incremental growth in the Global bond market, as corporates diversify funding bases and respond to capex commitments tied to digitalization and energy transition. 

By Sector: Real-estate dominance challenged by TMT innovation

Real estate & REITs held 32.1% of outstandings in 2024, but rising cap rates and office-price declines of up to 50% are eroding collateral valuations. In contrast, technology, media & telecom names are growing at a 6.51% CAGR, fueled by AI data-centre financings that blur real-estate and tech categories. Utilities are seeing 18% higher issuance to fund renewable-energy commitments. Healthcare remains a defensive stalwart, while consumer-discretionary faces margin compression.

TMT’s momentum indicates that digital infrastructure bonds will progressively substitute for traditional property assets in diversified portfolios. If cap-ex heavy cloud and semiconductor firms continue tapping structured-bond vehicles, the global bond market size linked to technology segments could exceed USD 3 trillion by decade-end, challenging real estate’s preeminence. 

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

North America retained 39.4% of the global bond market in 2024. Deep Treasury and agency markets provide ready collateral, and the US dollar’s reserve-currency role secures cross-border liquidity. Canada supplies resource-linked credits, while Mexico’s Comisión Federal de Electricidad issued USD 1.5 billion of sustainable notes, reflecting green-bond adoption within the region. Despite potential trade-policy headwinds, the Federal Reserve’s glide path toward lower rates supports coupon capture and prospective price appreciation. 

Asia-Pacific’s 6.73% CAGR to 2030 positions it as the primary growth engine. India’s full inclusion in the JPMorgan GBI-EM index is pulling USD 100 billion of fresh flows, deepening depth, and compressing bid-ask spreads. China remains resilient as foreign investors migrate from equities into onshore bonds amid relative-yield appeal. The Bank of Japan’s exit from negative rates adds incremental domestic demand for higher-yielding Japanese Government Bonds, while Australia debuted its first sovereign green bond in June 2024. IMF forecasts of 5.0% GDP growth across Emerging and Developing Asia underpin issuance expansion. 

Europe faces record-high 2025 sovereign-funding calendars that risk widening spreads, but the ECB’s cumulative 75 basis-points of cuts since mid-2024 have steadied secondary-market valuations. Ten-year benchmark yields are projected to tighten toward 3.0% by 2029. Nordic and BENELUX credits benefit from high ESG adoption, while Southern European issuers rely on EU budget backstops. AllianceBernstein identifies elevated coupons as cushions against macro shocks, even as total debt funding gaps narrow to EUR 86 billion for 2025-27. 

South America leverages commodity-price upswings to issue infrastructure bonds, though fiscal fragility in Argentina and Colombia constrains tenors. Middle East & Africa show bifurcation: Gulf Cooperation Council members exploit hydrocarbons cashflows to place sukuk, whereas several sub-Saharan states face sovereign-restructuring scenarios that curtail market access. Scarcity of long-dated hedging instruments continues to suppress liquidity in the region, tempering its contribution to overall global bond market growth.