The global bond market's new bull market is not a vote of confidence in sovereign bonds.

The global bond market has returned to a bull market trajectory, but this is largely due to the rise of corporate bonds, as investors are gradually losing interest in lending to sovereign nations. After the post-pandemic surge in inflation triggered a global sell-off, the US and global bond markets hit bottom in October 2022. Three years later, the Bloomberg Global Aggregate Total Return Index has rebounded by over 20% from its 2022 low, establishing a new bull market by standard definition. However, this is not a vote of confidence in sovereign debt - if anything, it may be the opposite. The total return index is mainly composed of sovereign debt, corporate debt, and securitized debt. It is the global corporate bonds that have significantly outperformed other categories.