Possible scenario
Fed Treasury Response
20%
+0.9%
If higher interest costs tighten financial conditions, the Federal Reserve and Treasury respond at the margin without directly monetizing deficits. Rate-cut guidance, a slower balance-sheet runoff, or larger Treasury buybacks could cushion markets.
What it moves
- Technology+1.0%
- Utilities+0.6%
- 10-year Treasury yield
- Riskier companies' borrowing costs
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