Possible scenario
Credit Conditions Tighten
22% Chance
Banks respond to the insolvency jump by reducing risk appetite, increasing collateral demands, and tightening credit for smaller firms. The result is a self-reinforcing squeeze on working capital, especially in construction, retail, and supplier networks.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
Secondary impacts
- Finance -0.8%
- Industrials -0.6%
- Consumer Cyclicals -0.4%
Portfolio impact
S&P 500-0.8%
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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