Possible scenario
Benign CPI Undershoot
20% Chance
Inflation undershoots the median forecast as energy pass-through proves less severe and core categories cool. Markets respond with lower yields, lower volatility, and a risk-on rotation into rate-sensitive sectors.
Initial impacts
- 10-year Treasury yield Down
- Market volatility Down
- Riskier companies' borrowing costs Down
- Oil prices Down
- US dollar Down
Secondary impacts
- Consumer Cyclicals +1.3%
Portfolio impact
S&P 500+0.9%
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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