What if a central bank's yield-curve-control peg breaks?
A YCC peg snap forces a violent repricing of the controlled long end higher, real yields jump and global duration-sensitive equities and gold sell on the discount-rate shock. The direct analogue is the BOJ's 2022-23 staged YCC widening that whipsawed JGBs and the yen; the RBA's Nov-2021 0.1% target abandonment is the cleaner 'peg actually breaks' case. Trade payers on the relevant curve and short the currency into the credibility loss, not equities.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A central bank's yield-curve-control peg fails under selling pressure, inflicting huge losses and shredding policy credibility instantly. The trigger decomposes into signed root‑shocks — Fed policy path ▲ · Financial conditions ▲ · Real yields ▲ — which propagate through our causal graph to the markets below.