Possible scenario
Contained Credit Strain
40% Chance
The most likely path is that subprime auto stress remains concentrated in weaker borrowers and nonbank lenders. Large banks and diversified finance companies absorb higher charge-offs through reserves while used-vehicle values prevent a disorderly loss cycle.
Initial impacts
- Market volatility Down
- Riskier companies' borrowing costs Down
- 10-year Treasury yield Up
Secondary impacts
- Consumer Cyclicals +0.3%
- Finance +0.1%
Tickers
Portfolio impact
S&P 500+0.2%
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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