Possible scenario
Cuts Hit Growth
15% Chance
Fiscal consolidation proves pro-cyclical, worsening the demand weakness already visible in retail sales and rate-sensitive sectors. The government remains committed to surplus, but the private sector absorbs a larger growth hit than Treasury expected.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
Secondary impacts
- Consumer Cyclicals -0.7%
- Finance -0.6%
- Industrials -0.5%
- Consumer Services -0.4%
Portfolio impact
S&P 500-0.3%
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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