Possible scenario
Growth And Credit Strain
20% Chance
The tightening cycle starts while eurozone growth is still fragile, making sovereign spreads and bank lending conditions the main transmission channels. Investors focus less on inflation credibility and more on whether higher rates intensify recession and credit risks.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- Copper Down
- US dollar Up
Secondary impacts
- Finance -2.2%
- Consumer Cyclicals
Portfolio impact
S&P 500-1.9%
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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