Possible scenario
Cuts Are Diluted
25% Chance
A fragmented National Assembly forces concessions that weaken the budget's fiscal adjustment. The watchdog's statement that the targets are only a minimum makes any dilution more damaging for credibility with rating agencies and Brussels.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -0.8%
- Industrials -0.5%
Portfolio impact
S&P 500-0.5%
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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