Possible scenario
Unfunded Broad Cut
20% Chance
Political pressure from households and opposition parties pushes the government toward a larger consumption tax cut with incomplete offsets. This would be more stimulative for retailers but would challenge the credibility of Takaichi's bond-issuance cap.
Initial impacts
- Market volatility Up
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- US dollar Up
Secondary impacts
- Finance -1.3%
- Consumer Cyclicals +0.9%
Portfolio impact
S&P 500-0.5%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.