Top Holders of U.S. Debt by Country.

Bond markets have been volatile due to rising interest rates and inflation. Ultrashort bonds have performed the best during rising rates, while mortgage bonds outperformed during recessions. Investment-grade corporate bonds and intermediate bonds may provide opportunities for investors. The Federal Reserve raised rates to 4.75%-5.00%, a level not seen since September 2007, and projections show it may reach 5.3% in 2023. However, if rates moderate or stop increasing, this may present better market conditions for bonds, and investors can potentially lock in strong yields as inflation may subside in the coming years ahead.