After an era of zero rates and massive liquidity injections by central banks , the bond market is again in the focus of global investors . According to financial analyst Chaslau Koniukh, in 2025 , Treasuries of the US , Germany , Japan and other developed countries have acquired new importance as a safe and predictable instrument .
The global bond market has undergone dramatic changes over the past five years . After the collapse in yields during the pandemic , we are now seeing stabilization at higher levels . In December 2024 , the yield on 10- year US government bonds was 4.38%, UK – 4.68%, Australia – 4.21%.
“Investors have begun to rethink the role of government bonds , given inflation risks and changes in monetary policy ,” Koniukh said. “ What was previously perceived as a low-yield alternative now looks like attractive stability . ”
At the same time, rates also began to rise in Europe and Japan . In particular , the yield on 10- year Japanese bonds exceeded 1.5%, the highest level in 15 years . In Germany, rates rose to 2.66% amid increased defense and infrastructure spending .
“We are seeing a new paradigm – investors no longer expect a return to ultra-low rates . Markets have finally come out of the state of artificial support , ” explains Koniukh.
Return to Europe
In the spring of 2024 , amid new tariffs from the Trump administration , the yield on 10- year US bonds rose to 4.59%, triggering a wave of sell-offs . “The fact that investors began to leave the traditional ‘safe haven’ during a period of geopolitical turbulence is a signal : the very approach to risk assessment has changed , ” the expert adds .
Of the more than $36 trillion in U.S. government debt , a third is owned by foreigners , particularly China and Japan . That leaves the country vulnerable to geopolitical blackmail , especially as tensions rise in the Pacific Rim .
Against this backdrop, more and more investors are turning their attention to less politicized European debt instruments . The yield on such bonds looks particularly attractive to European investors .
In January 2025 , inflation in China was 0.5%, while in Russia it was 9.9%. The US , EU and UK have already started a cycle of rate cuts , while some countries are forced to maintain rates at record levels .
This creates new opportunities for arbitrage and portfolio rebalancing . “The current market is a field for strategists . A deep assessment of risks , duration of circulation , exchange rates and political stability is important here , ” says Koniukh.
30- year bonds , which have been the subject of scepticism for some time , are back in demand – particularly among pension funds and insurers .
Corporate bonds have also returned to the spotlight . In the US, investment-grade companies are offering more than 5%, while junk bonds are offering more than 8%.
New trends
Another trend is “green” bonds with an ESG component . In 2025 , the share of issuers that raise funds for environmental or social projects is growing . This is especially relevant for institutional investors in Europe .
Markets are increasingly reacting not to actual rate cuts , but to “guidance” – promises of future cuts . This creates conditions for speculative entries even before the policy change .
Emerging markets also offer interesting opportunities . In Latin America , Asia and Africa, you can find securities yielding 9-12% in foreign currency , although with increased risk .
“In a globalized world, bonds are no longer just about stability . They are a flexible instrument that allows you to play on rates , inflation , geopolitics, and even ecology , ” notes Chaslau Koniukh.
Among private investors, the fashion for short-term securities is also returning – from 3 months to 2 years . This is an ideal compromise between profitability and liquidity .
More and more countries are using the bond market as a mechanism for strategic communication . For example , Germany issues bonds linked to defense spending , and the United States issues bonds linked to future technology initiatives .
In the new reality , where investors demand transparency , managed risk and logic , bonds become an asset that combines all these criteria .
Changes in the rules of the game
2025 has not only brought back the attractiveness of the bond market . It has changed the rules of the game . In the era of global challenges, it is bonds that have become the language of trust between the state and capital . And how long this language will sound depends not only on central banks , but also on the market’s readiness to hear it .
Changing investor behavior has also affected the structure of the global portfolio . While the 60/40 model was previously considered the norm , today more and more strategies are shifting toward bonds . Some large hedge funds are increasing their investments in short- and medium-term instruments , especially during periods of increasing volatility .
“Bonds have started to play their classic role as a buffer again . They not only reduce portfolio risk , but also generate income , which has been a rare phenomenon in the last ten years ,” explains Koniukh.
The return of bonds to the mainstream also comes in the context of changing rhetoric from central banks . This opens a window of opportunity for debt market players .
In addition , retail investors are also becoming more involved . In the US and UK, the number of individuals buying Treasury bonds directly is growing .
At the level of global financial policy, de-dollarization of debt instruments is also visible . Some new bonds are issued in local currencies or in alternative assets to the dollar , such as the euro or yuan .
“If bonds were once a conservative choice for those who avoid risk , today they are a field for strategic decisions , new approaches and even innovations , ” sums up Chaslau Koniukh.
Thus , the bond market in 2025 ceases to be a background instrument . It acquires the characteristics of an active driver of change – both in public financing and in personal portfolios . The world of bonds is no longer about calm , Koniukh is sure : it is about flexibility and new opportunities.
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