Possible scenario
Hawkish Rate Repricing
45% Chance
Markets treat Kashkari’s admission that the peak rate is unknown as confirmation that the Fed is not close to declaring victory on inflation. The most likely reaction is a modest hawkish repricing in Treasury yields and rate-sensitive equities, consistent with a Tier 3 routine macro adjustment.
Initial impacts
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Technology -0.9%
- Consumer Cyclicals -0.8%
Portfolio impact
S&P 500-0.7%
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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