What if sustainable-aviation-fuel mandates raise airline costs faster than fares can absorb?
Sustainable-aviation-fuel mandates and carbon costs raise airline expenses faster than they can be passed on, pressuring carrier margins and aviation credit.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
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 (gold) over time vs the crowd's (Polymarket, blue), 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. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. Sustainable-aviation-fuel mandates and carbon costs raise airline expenses faster than they can be passed on, pressuring carrier margins and aviation credit. The trigger decomposes into signed root‑shocks — Climate/crop supply ▲ · Consumer spending ▼ · Credit spreads ▲ · Jet fuel ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Wheat WHEATon Hyperliquid 📈 chart | Commodity | ▲ +0.5% hist +0.16–+0.27% · other way -0.63% (n=12) |
| 2 | Corn CORNon Hyperliquid 📈 chart | Commodity | ▲ +0.4% hist -0.23–+1.42% · other way -0.49% (n=12) |
| 3 | High-yield credit HYG 📈 chart | Rate | ▼ -0.3% hist -0.58–+0.04% · other way -0.36% (n=12) |
| 4 | United Airlines UAL 📈 chart | Equity | ▼ -0.3% hist -0.3–-0.04% · other way +12.13% (n=12) |
| 5 | Delta DAL 📈 chart | Equity | ▼ -0.2% hist -0.26–+0.3% · other way +8.14% (n=12) |
| 6 | Financials XLF 📈 chart | Equity | ▼ -0.2% hist -0.79–+0.23% · other way +0.44% (n=12) |
| 7 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.39–+0.04% · other way +20.8% (n=12) |
| 8 | JPMorgan JPM 📈 chart | Equity | ▼ -0.2% hist -1.81–+0.52% · other way +1.36% (n=12) |
| 9 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.2% hist -2.26–+6.22% · other way -11.64% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| CORN CORN | LONG | +1.1% · 5d -0.8% ↺ fades | 64% | 36 | 0.24 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d +0.0% ↺ fades | 64% | 36 | 0.21 | ✓ matches cascade |
| JPM JPM | SHORT | -1.6% · 5d -1.2% | 62% | 38 | 0.18 | ✓ matches cascade |
| Volatility VIX | LONG | +5.7% · 5d +5.5% | 58% | 36 | 0.14 | ✓ matches cascade |
| US dollar DXY | LONG | +0.7% · 5d +0.2% | 57% | 40 | 0.13 | · |
| WHEAT WHEAT | SHORT | +-0.0% · 5d -1.7% | 56% | 36 | 0.10 | ⚠ differs |
| DAL DAL | LONG | +0.4% · 5d +0.5% | 56% | 36 | 0.09 | ⚠ differs |
| MSTR MSTR | SHORT | -0.2% · 5d -2.3% | 56% | 36 | 0.09 | ✓ matches cascade |
| XLF XLF | SHORT | -0.6% · 5d -0.7% | 53% | 36 | 0.05 | ✓ matches cascade |
| Gold XAU | LONG | +0.1% · 5d +0.0% | 53% | 36 | 0.05 | · |
| UAL UAL | SHORT | -0.1% · 5d -0.5% | 50% | 36 | 0.00 | ✓ matches cascade |
| Bitcoin BTC | LONG | +2.5% · 5d -0.8% ↺ fades | 46% | 24 | 0.00 | · |
| 10y yield DGS10 | SHORT | 0bp · 5d -1bp | 50% | 40 | 0.00 | · |