Weekly Market Summary

Extra Credit^*

• Foreign investors have been the largest buyers of long-term U.S. fixed income over the past couple of years, purchasing almost $1 trillion on average in 2023 and 2024, with about half of that in U.S. Treasuries.
• Foreign investors bought about $900 billion in long-term (originally issued greater than one year) U.S. fixed-income securities in 2024, which—while somewhat slower than in the past couple of years—was still significantly higher than the average run-rate over the prior decade.
• Only about half of the demand for U.S. fixed income was in U.S. Treasuries in 2023 and 2024. Foreign investors have been major buyers of corporate bonds and agency securities, though demand fluctuates from one year to the next. Away from long-term fixed-income securities, they purchased $300 billion in U.S. equities in 2024 and continued to gradually add to their Treasury-bill holdings.
• Fundamentally, the current mix of policies in the U.S. may lead to lower growth and keep demand elevated for safe assets such U.S. Treasuries elevated (for example, a reduction in the trade deficit could result in weaker demand for riskier assets).
• Bank-loan and high-yield bond default rates, excluding distressed exchanges, finished February at 1.26% for high-yield bonds and 0.27% for bank loans, down from 1.50% and 0.30% in January. This is also well below the long-term historical default rate of 3% for loans and 3.4% for high yield, and the historical post-GFC default rates of 2.3% and 2.5%, respectively.

Sources: Bloomberg and JP Morgan as of 3/31/25.