Possible scenario
Financial Repression Path
20% Chance
Rather than a sudden default-style crisis, policymakers contain debt-service stress by allowing inflation to run somewhat above target while keeping real rates lower than they otherwise would be. This path eases nominal debt dynamics but risks weakening the dollar and embedding higher inflation expectations.
Initial impacts
- 10-year Treasury yield Down
- Riskier companies' borrowing costs Up
- Bitcoin Up
- Oil prices Up
- US dollar Down
- Market volatility Down
Secondary impacts
- Technology
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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