Foreign Demand for US Corporate Bonds Remains Strong
Goldman Sachs reports that foreign investors continue to purchase US corporate bonds despite rising Treasury yields and higher borrowing costs.
Foreign demand for US corporate bonds remains resilient despite the benchmark 10-year Treasury yield reaching 5% on Tuesday, the highest level since 2007. An analysis by Goldman Sachs indicates that net foreign purchases of these bonds totaled $251 billion through the end of June 2026, placing the year on a trajectory to nearly match the record $392 billion recorded in 2025.
Foreign investors currently hold approximately 29% of the US corporate bond market. European investors have been the primary drivers of this activity, accounting for 52% of net foreign purchases since early 2022, while Asian investors contributed 21%.
Analysts have specifically monitored whether Japanese institutions would repatriate funds in response to rising domestic yields, but Goldman Sachs suggests any such reductions would be manageable. This stability occurs as the market awaits a policy decision from the Federal Reserve System regarding borrowing costs.
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