Possible scenario
Loss Cycle Deepens
31% Chance
Longer loan terms collide with falling recoveries, pushing subprime auto losses higher and forcing lenders to build reserves. The stress is serious but still resembles a sector credit cycle rather than a broad banking crisis.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
Secondary impacts
- Consumer Cyclicals -2.4%
- Finance -1.9%
Tickers
Portfolio impact
S&P 500-1.4%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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