Global Bond Market to Reach USD 167.5 Trillion by 2031 Led by Treasury Bonds, Real Estate & REITs: Mordor Intelligence

HYDERABAD, India, Feb. 3, 2026 /PRNewswire/ -- According to Mordor Intelligence, the bond market size is projected to expand from USD 127.36 trillion in 2026 to USD 167.52 trillion by 2031, registering a CAGR of 5.62% over the forecast period. The market's growth is being driven by synchronized monetary easing across major central banks, stabilizing inflation expectations, and a renewed shift by institutional investors toward longer-duration bonds to secure stable yields and align with long-term liabilities. In parallel, technological advancements, including tokenized bond issuance and real-time settlement frameworks enabled by central bank digital currencies (CBDCs), are improving operational efficiency and reducing post-trade complexities. While high-yield and private-sector issuance continues to rise, sovereign bonds remain the cornerstone of market liquidity, providing critical benchmarks for pricing and risk assessment across the global fixed-income ecosystem.

Bond Market Share by Region

Asia-Pacific is emerging as the strongest contributor to global bond market share, driven by broad-based policy shifts and deepening investor participation. India's inclusion in a major emerging-market bond index is attracting sustained foreign inflows, improving market liquidity and tightening trading spreads. In China, global investors are increasingly favoring onshore bonds as an alternative to equities, supported by relative yield stability. Japan's move away from negative interest rates is encouraging renewed domestic interest in government bonds, while Australia's entry into sovereign green bonds reflects the region's growing focus on sustainable financing.

North America continues to play a central role in the global bond landscape, supported by highly liquid government and agency markets that underpin efficient collateral usage and cross-border trading. The dominance of the US dollar enhances the region's attractiveness for international investors, while Canada contributes through bonds linked to its resource-driven economy. In parallel, sustainable financing is gaining traction, with issuers increasingly turning to green and sustainability-focused instruments. Even as trade-related uncertainties persist, an easing interest-rate environment is encouraging investors to seek stable income opportunities and potential capital gains across the region's bond markets.

Bond Market Growth Drivers

Shifting Institutional Investment Strategies

Large institutional investors are increasingly reallocating portfolios toward long-duration bonds to better align future cash flows with long-term obligations. As income visibility improves in high-quality sovereign and corporate instruments, bonds are regaining their role as a dependable source of returns, reducing reliance on higher-risk assets. Regulatory frameworks are also encouraging this shift by favoring assets that closely match liability profiles. With aging populations placing greater emphasis on predictable income streams, this rebalancing trend is expected to continue, supporting sustained demand and improved liquidity across the global bond market.

Improving Inflation Outlook and Fixed-Income Demand

Stabilizing inflation expectations are reinforcing positive bond market trends, as central banks gradually shift from tightening to easing monetary conditions. With policy rates moving lower, investors are extending portfolio duration and reallocating from cash-like instruments into higher-quality bonds that continue to offer attractive income potential. As short-term yields ease, fixed income is regaining its traditional role as a core portfolio stabilizer. This transition is strengthening demand across global bond markets and supporting sustained participation from institutional and long-term investors.

Major Segments Highlighted in the Bond Market Report:

By Type

• Treasury Bonds
• Municipal Bonds
• Corporate Bonds
• High-Yield Bonds
• Mortgage-Backed Securities
• Others (Floating Rate Bonds, Zero-Coupon Bonds, Callable Bonds)

By Issuer

• Public Sector
• Private Sector

By Sector

• Energy & Utilities
• Technology, Media & Telecom
• Healthcare & Pharmaceuticals
• Consumer (Staples & Discretionary)
• Industrials
• Real Estate & REITs
• Others

By Geography

• North America
  - United States
  - Canada
  -  Mexico
• South America
  - Brazil
  - Peru
  - Chile
  - Argentina
  - Rest of South America
• Europe
  - Germany
  - United Kingdom
  - France
  - Italy
  - Spain
  - BENELUX (Belgium, Netherlands, Luxembourg)
  - Nordics (Sweden, Norway, Denmark, Finland)
  - Rest of Europe
• Asia-Pacific
  - China
  - India
  - Japan
  - South Korea
  - Australia
  - South East Asia
  - Indonesia
  - Rest of Asia-Pacific
• Middle East and Africa
  - United Arab Emirates
  - Saudi Arabia
  - South Africa
  - Nigeria
  - Rest of Middle East and Africa

Overview – Global Bond Industry

Global Bond Companies

• Morgan Stanley
• Wells Fargo & Co.
• United States Treasury (Sovereign)
• Government of Japan
• UBS Group AG
• Société Générale
• Credit Suisse Group AG
• Saudi Aramco
• Berkshire Hathaway Inc.
• People's Republic of China
• JPMorgan Chase & Co.
• Goldman Sachs Group Inc.
• BlackRock Inc.
• HSBC Holdings plc
• Bank of America Corp.
• BNP Paribas S.A.
• Citigroup Inc.
• Deutsche Bank AG
• Credit Agricole S.A.
• Barclays plc
• European Union & EFSF/ESM
• AT&T
• Microsoft
• Verizon Communications

Get in-depth industry insights on the bond market research report: https://www.mordorintelligence.com/industry-reports/bond-market?utm_source=prnewswire

Explore related reports from Mordor Intelligence

Private Equity Market: The global private equity market is segmented by fund type, sector focus, investment size, and geography. By fund type, it includes buyout and growth funds, venture capital funds, mezzanine and distressed strategies, as well as secondaries and fund-of-funds vehicles. Sector-wise, investments span technology and software, healthcare, real estate and business services, financial services, industrials, consumer and retail, energy and power, media and entertainment, telecommunications, and transportation-related segments. Based on investment size, the market covers large-cap deals, upper and lower middle-market investments, and small and SMID transactions. Geographically, private equity activity extends across North America, South America, Asia-Pacific, Europe, and the Middle East and Africa, with participation from major developed and emerging economies within each region.
https://www.mordorintelligence.com/industry-reports/global-private-equity-market?utm_source=prnewswire

Green Bonds Market Size: The global green bonds market was valued at USD 673.12 billion in 2025 and is projected to grow from USD 699.11 billion in 2026 to reach around USD 844.61 billion by 2031, registering a CAGR of 3.86%.

Hedge Fund Market Analysis: The hedge fund market is becoming increasingly concentrated, with the largest platforms controlling most of the personnel and resources. These firms operate like internal marketplaces, allocating capital to teams based on projected risk-adjusted returns. Citadel relies on a centralized technology infrastructure to manage extensive trading across multiple asset classes, while Millennium uses AI-driven systems to provide real-time liquidity insights to all teams.

About Mordor Intelligence:   

Mordor Intelligence is a trusted partner for businesses seeking comprehensive and actionable market intelligence. Our global reach, expert team, and tailored solutions empower organizations and individuals to make informed decisions, navigate complex markets, and achieve their strategic goals.   

With a team of over 550 domain experts and on-ground specialists spanning 150+ countries, Mordor Intelligence possesses a unique understanding of the global business landscape. This expertise translates into comprehensive market analysis and research reports as well as syndicated and custom research offerings that cover a wide spectrum of industries, including aerospace & defence, agriculture, animal nutrition and wellness, automation, automotive, chemicals & materials, consumer goods & services, electronics, energy & power, financial services, food & beverages, healthcare, hospitality & tourism, information & communications technology, investment opportunities, and logistics. 

For media inquiries or further information, please contact:   
[email protected]
https://www.mordorintelligence.com/contact-us

Logo: https://mma.prnewswire.com/media/2746908/Mordor_Intelligence_Logo.jpg

SOURCE Mordor Intelligence Private Limited