Possible scenario
Term Premium Repricing
27% Chance
Investors interpret the BIS warning as another signal that sovereign bond supply and debt-service costs will remain elevated. Long-duration assets weaken as the market prices a higher fiscal-risk premium, especially in the United States, France, Italy and Japan.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Utilities -0.6%
- Technology -0.6%
- Finance
Portfolio impact
S&P 500-0.8%
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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