Possible scenario
Confidence Holds
45% Chance
Investors accept Kashkari’s view that the September rate hike does not threaten the banking system. The near-term reaction is mildly risk-on because the comment lowers the probability of a repeat of 2023-style bank stress.
Initial impacts
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Down
- Market volatility Down
- US dollar Up
Secondary impacts
- Finance +0.5%
- Consumer Cyclicals -0.2%
Portfolio impact
S&P 500+0.1%
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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