Possible scenario
Credit Stress Spreads
20% Chance
The key risk is that paycheck-to-paycheck behavior among $300,000 earners turns into higher delinquency rates among borrowers previously viewed as low risk. Banks and card issuers respond by reducing credit-line growth and increasing loss reserves.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
Secondary impacts
- Finance -0.4%
- Consumer Cyclicals -0.4%
Tickers
Portfolio impact
S&P 500-0.3%
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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