Possible scenario
Tightening Risk Returns
15% Chance
A smaller but important risk is that Hammack's warning marks the start of renewed discussion about whether policy is restrictive enough. If inflation and demand data remain hot, markets may begin pricing a non-trivial chance of another rate hike.
Initial impacts
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Technology -1.6%
- Consumer Cyclicals -1.3%
Portfolio impact
S&P 500-1.3%
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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