‘The higher that yields go — for at least new money — it becomes more enticing to think about putting money into bonds,’ one strategist notes
Investors are hoping that a historically bad stretch for the bond market will end at some point. Yet in 2026, they aren’t all avoiding bonds entirely while waiting for the trouble to blow over.
The Bloomberg Aggregate Bond Index — the bond market’s equivalent of the S&P 500 SPX stock benchmark — was down 1.6% on a total-return basis this year through Wednesday’s close, according to Dow Jones Market Data.
The index return had flipped between negative and positive performance earlier in the year, but went consistently more negative in August as global crude-oil prices climbed toward $100 a barrel. The Bloomberg index includes Treasurys, corporate bonds, mortgage-backed securities and other government-backed debt. It doesn’t include ultrashort Treasury bills.
China’s holdings of U.S. Treasury securities reached an 18-year low in July, new Treasury Department data shows.
Why it matters: It’s not just China. Foreign governments are pulling back on buying Treasury securities, and hedge funds and other private investors are filling the void.
That poses some risks to the ability of the U.S. to borrow money cheaply, as analysts say it could put upward pressure on borrowing costs.
Zoom in: China’s holdings of Treasury securities fell to $618 billion in July, the lowest level since August 2008, when they were at $573.7 billion.
China, the world’s second-largest economy, has been moving away from these investments for the past decade and accelerated the shift after 2022, when the U.S. froze Russian assets and prompted a lot of countries to have second thoughts about storing wealth in America.
https://www.axios.com/2026/09/18/china-treasury-bonds-rates
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