Possible scenario
Managed Fiscal Tightening
38% Chance
Major economies respond to the IMF warning with medium-term consolidation plans rather than abrupt austerity. The most likely path is a mix of spending caps, targeted tax increases, and slower entitlement growth because governments still face high interest bills and defense demands.
Initial impacts
- 10-year Treasury yield Down
- Riskier companies' borrowing costs Down
- Market volatility Down
- Copper Down
- US dollar Down
Secondary impacts
- Technology +0.4%
- Utilities
Portfolio impact
S&P 500+0.2%
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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