Possible scenario
Border Conflict Escalates
18% Chance
The Eritrea-Ethiopia rupture becomes the main driver of the crisis, with Egypt's move seen as part of a wider diplomatic realignment. A broader military escalation is less likely than containment, but renewed fighting in Afar would raise Red Sea and Horn of Africa risk premiums.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +0.5%
Portfolio impact
S&P 500-0.6%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.