Possible scenario
Credit Stress Escalates
17% Chance
A less likely but important downside case is that falling prices expose stretched borrowers who refinanced at much higher rates. Forced listings increase, bank provisioning rises, and investors begin to price a sharper deterioration in New Zealand credit quality.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
Secondary impacts
- Finance -2.1%
- Non-Energy Materials -1.3%
- Consumer Cyclicals -1.1%
Portfolio impact
S&P 500-1.0%
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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