Possible scenario
Bear Steepening Persists
45% Chance
The most likely path is a continued but mostly orderly rise in long-end Treasury yields as investors demand more compensation for inflation risk, Fed tightening and heavy Treasury issuance. The move pressures duration-sensitive equities, housing-related firms and utilities, while credit conditions tighten modestly.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Utilities -2.0%
- Technology -1.7%
Portfolio impact
S&P 500-1.4%
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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