Possible scenario
Downgrade Political Rupture
23% Chance
The fiscal standoff turns into a sovereign-credit event or a full political crisis. This path would make the 5% yield level look less like a temporary overshoot and more like a repricing of France’s long-term debt sustainability.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -4.4%
- Industrials -2.9%
Portfolio impact
S&P 500-3.1%
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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