Possible scenario
Limited EU Flexibility
42% Chance
The European Commission grants narrowly defined flexibility under the reformed Stability and Growth Pact, likely framed around temporary inflation compensation and investment protection. This is the most likely outcome because Brussels will want to avoid reigniting euro-area sovereign stress while preserving the credibility of the 2023 fiscal framework.
Initial impacts
- Riskier companies' borrowing costs Down
- Market volatility Down
- 10-year Treasury yield Up
- US dollar Down
Secondary impacts
- Utilities +0.4%
- 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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