What if US inflation runs hot at over 1% in a single month?
A 1%+ MoM CPI surprise reprices the Fed path hawkishly; the cleanest trade is long-duration tech down as real yields jump and breakevens widen. Rhymes with the Feb-2024 hot CPI that knocked the Nasdaq ~1.7% and added 15bp to 10s in a session. Note today's setup: with the cutting cycle in train, a single hot print is more likely to be faded as noise than in 2022 — sharper initial gap, faster mean-reversion.
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 0–6 months 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. US CPI prints a shock 1%+ month-over-month, reviving an inflation scare. The trigger decomposes into signed root‑shocks — Inflation surprise ▲ — 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 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.76–-0.13% · other way -1.17% (n=10) |
| 2 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -1.37–+0.18% · other way -1.45% (n=10) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -1.39–+1.79% · other way -3.44% (n=10) |
| 4 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.6% hist -1.77–+0.36% · other way +2.43% (n=9) |
| 5 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -0.8–+0.82% · other way -5.52% (n=7) |
| 6 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +6bp hist -1.4–+4.35% · other way +5.5% (n=10) |
| 7 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -2.68–+0.95% · other way -1.22% (n=2) |
| 8 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +5bp hist -2.28–+5.02% · other way +4.5% (n=10) |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -1.73–+2.9% · other way -1.47% (n=2) |
| 10 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.3% model prior · unmeasured |
| 11 | Arm ARMon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -12.61–+6.14% · other way -10.06% (n=2) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -1.0–+0.32% · other way +1.79% (n=10) |
| 13 | Robinhood HOODon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -3.36–+1.52% · other way +24.21% (n=2) |
| 14 | Homebuilders XHB 📈 chart | Equity | ▼ -0.3% hist -1.04–+2.68% · other way +2.31% (n=8) |
Probable recommendation
Why we may diverge from history
Trust the cascade short on XHB: the +3.3% rests on cool-CPI rate-cut rallies and a JPY-intervention window — opposite shocks to a 1%+ hot CPI; the lone hot-CPI analogue (Aug-2022) printed -9%, on-channel.
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 |
|---|---|---|---|---|---|---|
| ARM ARM | SHORT | -12.2% · 5d -10.9% | 86% | 7 | 0.56 | ✓ matches cascade |
| XHB XHB | LONG | +2.6% · 5d -0.4% ↺ fades | 61% | 28 | 0.19 | ⚠ differs |
| USDJPY USDJPY | LONG | +0.0% · 5d +0.2% | 59% | 29 | 0.16 | ✓ matches cascade |
| Gold XAU | SHORT | -1.4% · 5d -0.6% | 57% | 28 | 0.13 | ✓ matches cascade |
| SMH SMH | LONG | +0.6% · 5d -0.9% ↺ fades | 57% | 28 | 0.13 | ⚠ differs |
| GBPUSD GBPUSD | SHORT | -0.6% · 5d +0.2% ↺ fades | 57% | 28 | 0.13 | ✓ matches cascade |
| NVDA NVDA | SHORT | -4.1% · 5d -4.5% | 57% | 28 | 0.12 | ✓ matches cascade |
| NDX NDX | SHORT | -0.9% · 5d -1.0% | 58% | 38 | 0.11 | ✓ matches cascade |
| High-yield credit HYG | LONG | +0.4% · 5d +0.1% | 57% | 28 | 0.11 | ⚠ differs |
| Volatility VIX | SHORT | -0.6% · 5d +1.9% ↺ fades | 56% | 36 | 0.09 | · |
| 30y yield DGS30 | SHORT | -4bp · 5d 0bp | 55% | 40 | 0.08 | ⚠ differs |
| EURUSD EURUSD | SHORT | -0.5% · 5d +0.1% ↺ fades | 54% | 28 | 0.06 | ✓ matches cascade |
| XLK XLK | SHORT | -0.3% · 5d -0.8% | 54% | 28 | 0.05 | ✓ matches cascade |
| US dollar DXY | LONG | +0.2% · 5d +0.0% | 53% | 40 | 0.05 | ✓ matches cascade |
Why this probability
1%+ MoM CPI is rare; 2026 inflation cooling, but tariff pass-through keeps small tail. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.