In May 2026, the 10-year U.S. Treasury yield stabilized around 4.45% amid heightened geopolitical tensions in the Middle East and uncertainty surrounding U.S.-Iran negotiations, which continued to support elevated oil prices and inflation expectations. U.S. headline CPI accelerated to 3.8% YoY in April (vs. 3.3% prior), marking the highest level since May 2023, while core CPI edged up to 2.8% YoY from 2.6%. The Federal Reserve kept the federal funds rate unchanged at 3.50%-3.75% for a third consecutive meeting, although FOMC minutes signaled a more hawkish stance as inflation remained above target. In Indonesia, inflation rose to 3.08% YoY in May (vs. 2.42% prior), while Bank Indonesia raised the BI-Rate by 50 bps to 5.25% to support the rupiah and contain inflation risks. Indonesia’s 10-year government bond yield stood at around 6.72% by the end of May, supported by continued demand for government securities despite tighter monetary conditions. Sukuk issuance rebounded to IDR 3.2 trillion in May (vs. IDR 2.0 trillion in April), bringing 5M26 issuance to IDR 15.4 trillion. Meanwhile, corporate bond issuance also recovered to IDR 7.9 trillion (vs. IDR 5.7 trillion in April), with year-to-date issuance reaching IDR 54.3 trillion.