Possible scenario
Auction Stress Accelerates
20% Chance
A more adverse path is that investors treat the 5.70% print as evidence of a buyers' strike rather than a valuation opportunity. Weak auctions, fiscal worries after the Moody's downgrade, and lower Japanese demand push the term premium sharply higher.
Initial impacts
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Utilities -3.4%
- Finance -3.3%
- Technology
Portfolio impact
S&P 500-2.8%
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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