Possible scenario
Political Crisis Returns
22% Chance
The debt projection and downgrade intensify conflict over the 2027 budget, reviving the pattern that led to the 2024 government collapse. This path would make fiscal consolidation harder and could force investors to demand a larger premium for French assets.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -4.0%
- Consumer Cyclicals -2.4%
Portfolio impact
S&P 500-2.2%
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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