Possible scenario
Orderly Tightening Path
45% Chance
The ECB begins tightening with a measured 25-bp move and frames the cycle as data-dependent rather than open-ended. Markets absorb the pivot because inflation risks had already been flagged by ECB officials and partially priced into bonds.
Initial impacts
- 10-year Treasury yield Up
- Market volatility Up
- Riskier companies' borrowing costs Down
- US dollar Down
Secondary impacts
- Utilities -0.7%
- Consumer Cyclicals -0.5%
Portfolio impact
S&P 500-0.2%
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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