Possible scenario
Inflation Policy Tension
20% Chance
The extended El Nino complicates the inflation outlook just as several central banks were preparing or considering easier policy. The largest market effects come through inflation expectations, emerging-market rates and consumer purchasing power rather than through a full risk-off shock.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Consumer Cyclicals -0.6%
- Finance -0.4%
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.
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