Possible scenario
Deficit Mostly Absorbed
45% Chance
Markets treat the $2 trillion deficit as a continuation of the trend already flagged by the CBO, Treasury borrowing plans, and the fiscal 2025 shortfall. The reaction is concentrated in long-end Treasury supply and term-premium pricing rather than a broad risk-off move.
Initial impacts
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- Market volatility Up
Secondary impacts
- Utilities -0.3%
- Technology -0.2%
- Finance -0.1%
Portfolio impact
S&P 500-0.2%
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.