Possible scenario
Funding Stress Emerges
20% Chance
The yield shock exposes renewed stress in bank balance sheets, especially where securities losses, commercial real estate exposure and deposit competition overlap. This path is less likely than a policy backstop but becomes plausible if equity declines trigger depositor and counterparty caution.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
- Bitcoin Down
Secondary impacts
- Finance -6.4%
- Consumer Cyclicals
Portfolio impact
S&P 500-4.3%
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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