Possible scenario
Fiscal Premium Escalates
27% Chance
A less benign scenario is that investors demand a larger concession for Treasury supply and the roughly $1.8 trillion deficit backdrop. This would resemble a fiscal-risk repricing rather than a normal rates adjustment, with broader pressure on duration-sensitive assets.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Utilities -3.3%
- Technology -2.8%
- Finance
Portfolio impact
S&P 500-2.3%
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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