Possible scenario
Sticky Inflation Drag
30% Chance
The confidence decline is driven more by inflation fatigue than job losses, leaving the Federal Reserve constrained. Markets price a stagflationary mix of weaker real demand, firmer inflation expectations, and limited near-term policy relief.
Initial impacts
- Market volatility Up
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- Oil prices Up
Secondary impacts
- Consumer Cyclicals -1.2%
- Energy +0.7%
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.
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