Possible scenario
Disorderly Bond Selloff
20% Chance
A less likely but important risk is that the auction result becomes evidence of a broader demand problem for Treasury supply. In that case, volatility rises, liquidity worsens and credit markets begin to price tighter financial conditions.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Up
- US dollar Up
- Copper Down
Secondary impacts
- Technology -2.4%
Portfolio impact
S&P 500-2.0%
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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