In June 2026, the 10-year U.S. Treasury yield rose to around 4.46% as resilient labor market data and persistent inflation reinforced expectations that the Federal Reserve would maintain a hawkish policy stance. U.S. headline CPI accelerated to 4.2% YoY in May (vs. 3.8% prior), while core CPI edged up to 2.9% YoY from 2.8%, supported by elevated energy prices amid ongoing tensions in the Middle East. The Federal Reserve kept the federal funds rate unchanged at 3.50%–3.75% for a fourth consecutive meeting, although updated projections signaled a more hawkish outlook, with policymakers indicating at least one additional rate hike could still be delivered this year. In Indonesia, inflation increased to 3.34% YoY in June, while Bank Indonesia raised the BI-Rate by a cumulative 100 bps since May to 5.75%. Indonesia’s 10-year government bond yield climbed to around 7.17% by the end of June, reflecting tighter domestic monetary policy. Despite the higher interest rate environment, activity in the domestic debt capital market remained resilient, with sukuk issuance rising to IDR 3.9 trillion in June (vs. IDR 3.2 trillion in May), bringing cumulative issuance to IDR 19.3 trillion in 1H26. Meanwhile, corporate bond issuance moderated to IDR 5.3 trillion (vs. IDR 7.9 trillion in May), although year-to-date issuance continued to increase to IDR 59.6 trillion.