What if automation pushes wage growth into deflation?
Sustained negative nominal wage growth from displacement crushes consumer-discretionary demand and widens credit spreads while boxing in the Fed (cut into deflation vs. defend credibility). Rhymes with the 2015-16 disinflation/wage-stagnation scare and Japan's wage-deflation trap. Cleanest expression: short high-beta crypto and discretionary, long duration; the demand-destruction leg dominates any disinflation tailwind to multiples.
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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 3–10 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. Sustained displacement pushes nominal wage growth negative, complicating Fed policy and crushing consumer-discretionary demand. The trigger decomposes into signed root‑shocks — Job displacement ▲ · Recession signal ▲ — which propagate through our causal graph to the markets below.