Possible scenario
Managed Fiscal Adjustment
35% Chance
Washington and Beijing respond to IMF pressure with partial, politically feasible consolidation rather than austerity. The most likely path is a mix of slower spending growth, debt swaps, tax enforcement and targeted stimulus restraint that stabilizes bond-market concerns without sharply cutting demand.
Initial impacts
- Riskier companies' borrowing costs Down
- Market volatility Down
- 10-year Treasury yield Down
- US dollar Down
- Copper Down
Secondary impacts
- Technology +0.6%
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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