Possible scenario
Debt Service Squeeze
30% Chance
Governments and leveraged borrowers face higher refinancing costs as old low-coupon debt matures. Markets do not price a crisis, but higher term premia and wider credit spreads weigh on rate-sensitive sectors and weaker corporate borrowers.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Finance -1.3%
- Technology -0.9%
- Utilities
Portfolio impact
S&P 500-1.2%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.