Possible scenario
Ethiopia-Eritrea War
20% Chance
The diplomatic rupture becomes a direct interstate conflict between Ethiopia and Eritrea. This is less likely than a contained Ethiopian civil-war escalation, but the expulsion of diplomats and Eritrean troop movements in Afar raise the risk of miscalculation.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
Secondary impacts
- Energy +0.7%
Portfolio impact
S&P 500-0.8%
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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