Possible scenario
Bear Steepening Extends
40% Chance
The most likely path is that investors continue demanding higher term premium for holding long-dated Treasuries, citing large federal deficits, heavy Treasury issuance and reduced foreign demand. The move remains primarily a bond-market repricing rather than a full financial crisis, but rate-sensitive equities and credit weaken.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Utilities -2.2%
- Technology -1.8%
Portfolio impact
S&P 500-1.6%
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.