Public Markets 3 Hours

Last updated: May 16, 2026, 2:30 PM ET

Public Markets Wrap

Political turbulence in the U.S. and U.K. sparked demand for Treasuries, with the 10-year yield slipping 4 basis points to 4.18% as investors weighed the implications of a prolonged aircraft carrier deployment and stalled harassment reforms. The U.S.S. Gerald R. Ford's record deployment added to geopolitical risk premiums, while stalled congressional action on harassment eroded confidence in legislative stability. In the U.K., Prime Minister Starmer's unchallenged leadership failed to calm market nerves amid speculation about a potential rival, keeping sterling volatile.

Fixed Income & Currencies

The flight to quality lifted short-term Treasury yields lower, with the two-year note falling 5 basis points, as the Trump administration's consideration of a $1.7 billion fund for political allies raised fiscal policy uncertainty. This curbed dollar strength, allowing the euro to rebound 0.3% and the yen to stabilize near 156 per dollar. Japanese government bond yields mirrored the Treasury move, with the 10-year JGB yield dropping 3 basis points, as traders pared bets on further BOJ tightening.