Possible scenario
Quarter-Point Hike
26% Chance
A less likely but plausible outcome is that the inflation beat, firmer wage growth, and Catherine Mann's public support for tightening shift enough MPC votes toward an immediate 25 basis-point increase. This would be treated as a hawkish surprise because Bailey had previously signaled tolerance for a temporary inflation overshoot.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
Secondary impacts
- Consumer Cyclicals -1.0%
- Technology -0.9%
- Industrials -0.4%
Portfolio impact
S&P 500-0.6%
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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