Possible scenario
Downgrade Cycle Begins
25% Chance
The government deadlock lasts long enough to convince rating agencies that fiscal consolidation is no longer politically deliverable. Romania loses some investment-grade support, raising funding costs for the Treasury, banks, and regulated domestic issuers.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -1.0%
- Utilities -0.7%
- Industrials
Portfolio impact
S&P 500-0.9%
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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