Bond Market

Extracted Attributes

• Market Structure

  Decentralized over-the-counter (OTC)

• U.S. Market Share

  39%

• Typical Denominations

  $1,000 to $10,000 USD

• Market Classifications

  Corporate, Government and agency, Municipal, Mortgage-backed/Asset-backed, Funding

• Primary Reporting System

  FINRA's Trade Reporting And Compliance Engine (TRACE)

• U.S. Market Valuation (2021)

  $46 trillion USD

• Global Market Valuation (2021)

  $119 trillion USD

Timeline

• Governments began issuing bonds more frequently in the early 20th century, leading to the rise of the modern bond market. (Source: PIMCO)

  1901-01-01

• The bond market became larger and more diverse during the 1970s and 1980s, resulting in more frequent price changes and increased trading activity. (Source: PIMCO)

  1970-01-01

• The global bond market reached an estimated total debt outstanding of $119 trillion, with the U.S. market reaching $46 trillion. (Source: SIFMA via Wikipedia)

  2021-12-31

Bond market

The bond market (also debt market or credit market) is a financial market in which participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills, and so on for public and private expenditures. The bond market has largely been dominated by the United States, which accounts for about 39% of the market. In 2021, the size of the bond market (total debt outstanding) was estimated to be $119 trillion worldwide and $46 trillion for the US market, according to the Securities Industry and Financial Markets Association (SIFMA). Bonds and bank loans form what is known as the credit market. The global credit market in aggregate is about three times the size of the global equity market. Bank loans are not securities under the U.S. Securities and Exchange Act, but bonds typically are and are therefore more highly regulated. Bonds are typically not secured by collateral (although they can be), and are sold in relatively small denominations of around $1,000 to $10,000. Unlike bank loans, bonds may be held by retail investors. Bonds are more frequently traded than loans, although not as often as equity. Nearly all of the average daily trading in the U.S. bond market takes place between broker-dealers and large institutions in a decentralized over-the-counter (OTC) market. However, a small number of bonds, primarily corporate ones, are listed on exchanges. Bond trading prices and volumes are reported on the Financial Industry Regulatory Authority's (FINRA) Trade Reporting And Compliance Engine, or TRACE. An important part of the bond market is the government bond market, because of its size and liquidity. Government bonds are often used to compare other bonds to measure credit risk. Because of the inverse relationship between bond valuation and interest rates (or yields), the bond market is often used to indicate changes in interest rates or the shape of the yield curve, the measure of "cost of funding". The yield on government bonds in low risk countries such as the United States and Germany is thought to indicate a risk-free rate of default. Other bonds denominated in the same currencies (U.S. dollars or euros) will typically have higher yields, in large part because other borrowers are more likely than the U.S. or German central governments to default, and the losses to investors in the case of default are expected to be higher. The primary way to default is to not pay in full or not pay on time.

Web Search Results

• Bond market

  The bond market (also debt market or credit market) is a financial market in which participants can issue new debt, known as the primary market, or buy and sell debt securities "Security (finance)"), known as the secondary market. This is usually in the form of bonds "Bond (finance)"), but it may include notes, bills, and so on for public and private expenditures. The bond market has largely been dominated by the United States, which accounts for about 39% of the market. In 2021, the size of [...] ## Types [edit] The Securities Industry and Financial Markets Association (SIFMA) classifies the broader bond market into five specific bond markets. Corporate Government and agency Municipal Mortgage-backed, asset-backed, and collateralized debt obligations Funding ## Participants [edit] Bond market participants are similar to participants in most financial markets and are essentially either buyers (debt issuer) of funds or sellers (institution) of funds and often both. [...] Nearly all of the average daily trading in the U.S. bond market takes place between broker-dealers and large institutions in a decentralized over-the-counter "Over-the-counter (finance)") (OTC) market. However, a small number of bonds, primarily corporate ones, are listed on exchanges. Bond trading prices and volumes are reported on the Financial Industry Regulatory Authority's (FINRA) Trade Reporting And Compliance Engine, or TRACE.

• Everything You Need to Know About Bonds

  Until then, however, the bond market was primarily a place for governments and large companies to borrow money. The main investors in bonds were insurance companies, pension funds and individual investors seeking a high quality investment for money that would be needed for some specific future purpose. [...] All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. [...] Since governments began to issue bonds more frequently in the early twentieth century and gave rise to the modern bond market, investors have purchased bonds for several reasons: capital preservation, income, diversification and as a potential hedge against economic weakness or deflation. When the bond market became larger andmore diverse in the 1970s and 1980s, bonds began to undergo greater and more frequent price changes and many investors began to trade bonds, taking advantage of another

• How to Buy Bonds: A Guide for Beginners

  Once a bond’s interest rate is set and made available to investors, the bond trades in what’s called the bond market. Then, prevailing interest rates dictate how the bond’s price fluctuates. [...] The easiest way to start investing in bonds is through a bond exchange-traded fund (ETF). A bond ETF is a basket of hundreds or thousands of bonds with varying interest rates and maturity dates. When you buy a share of a bond ETF, your investment is spread across all of these bonds, increasing your diversification. The largest bond ETFs are Vanguard's Total Bond Market ETF (BND) and BlackRock's iShares Core U.S. Aggregate Bond ETF (AGG). [...] You can buy bonds from the bond market via a broker, through an ETF or directly from the U.S. government. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

• Bond market outlook 2026 | Fidelity

  In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused [...] The Bloomberg US Aggregate Bond Index measures the performance of the total US investment-grade bond market, and includes investment-grade US Treasury bonds, government-related bonds, corporate bonds, mortgage-backed pass-through securities, commercial mortgage-backed securities, and asset-backed securities that are publicly offered for sale in the US. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 1236456.1.0 [...] ### Debt, inflation, and interest rates Another key question for the year ahead is whether or how the US federal government’s growing debt burden may impact the bond market. As the federal government becomes more deeply indebted, it must issue more bonds—increasing the supply of government debt in the market. Without a commensurate rise in demand from buyers, that additional supply could drive yields up and prices down on government bonds.

• How changing interest rates impact the bond market - U.S. Bank

  Several forces drive yields, and investors benefit when they separate bond market forces by maturity. For example, central bank interest rate policy targets and market rate expectations typically dominate shorter-term yields because central banks directly influence overnight financing rates. Meanwhile, longer-term yields respond more to economic growth and inflation expectations, since investors weigh the opportunity cost of holding bonds versus deploying capital elsewhere. Finally, credit [...] Inflation remains above target, while tariffs show limited pricing impact so far. Policy decisions remain central to bond-market direction. Fiscal deficits and Treasury issuance shape longer-term yields; diversification and selective higher-yield exposure can enhance income and portfolio resilience. [...] Bonds can play an important role in a diversified portfolio, and today’s environment offers a clearer opportunity to lock in income than investors have seen in years. Investors can also expand beyond U.S. Treasuries to seek incremental yield, although each sector introduces different risks and tradeoffs. Recently, 10-year Treasury yields have generally stayed in a 4.00 to 4.25% range, while other bond types offer additional yield in exchange for credit, liquidity, or interest rate risk.1