Possible scenario
Diversification Accelerates
20% Chance
China uses foreign-bank custody as a bridge while continuing to reduce direct Treasury exposure and increase allocations to gold, euro-area assets, and other reserve instruments. The central issue shifts from hidden ownership to whether official foreign demand for Treasurys is structurally weakening.
Initial impacts
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Technology -1.3%
- Finance -0.8%
Portfolio impact
S&P 500-1.0%
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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