Possible scenario
Stagflation Policy Bind
25% Chance
The trade miss intensifies the dilemma for the Reserve Bank of Australia after its rate increase to 4.60%. A weaker external sector points to slower growth, but the RBA may remain worried that a softer Australian dollar and sticky prices keep inflation risks alive.
Initial impacts
- Market volatility Up
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
Secondary impacts
- Non-Energy Materials -0.5%
- Consumer Cyclicals -0.1%
- Finance -0.1%
Portfolio impact
S&P 500-0.1%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.