Possible scenario
Productivity-Led Disinflation
30% Chance
Warsh’s remarks are read as balanced or mildly dovish because AI could raise productivity and reduce unit labor costs over time. Markets focus on the possibility that the Fed can look through some AI-related volatility without over-tightening.
Initial impacts
- Riskier companies' borrowing costs Down
- Market volatility Down
- 10-year Treasury yield Down
Secondary impacts
- Technology +0.8%
- Business Services +0.4%
- Consumer Cyclicals +0.3%
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.
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