Possible scenario
Growth Scare Reversal
25% Chance
The yield spike itself tightens financial conditions enough to trigger a defensive rotation into Treasuries. This scenario is plausible because the move above 5% raises the risk that housing, credit and equity markets begin to transmit tighter policy back into growth expectations.
Initial impacts
- 10-year Treasury yield Down
- Riskier companies' borrowing costs Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Industrials -0.8%
- Finance -0.7%
- Utilities
Portfolio impact
S&P 500-0.1%
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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