What if US fiscal deficits erode dollar confidence even as yields stay elevated?
Persistent US deficits and reserve-diversification away from Treasuries erode dollar confidence, lifting the term premium and weakening the dollar despite high yields.
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 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. 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. Persistent US deficits and reserve-diversification away from Treasuries erode dollar confidence, lifting the term premium and weakening the dollar despite high yields. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Dollar/reserve confidence ▼ · Real yields ▲ · Risk appetite ▼ — 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 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +2.9% hist -0.94–+1.84% · other way +27.47% (n=12) |
| 2 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.8% hist +0.31–+1.62% · other way +0.37% (n=12) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.6% hist -1.38–+1.93% · other way +6.05% (n=11) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +13bp hist -3.32–+9.38% · other way +8.8% (n=12) |
| 5 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +12bp hist -4.95–+10.8% · other way +9.1% (n=12) |
| 6 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -1.2% hist -0.83–-0.1% · other way +0.89% (n=12) |
| 7 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +1.1% hist -0.05–+1.64% · other way +21.75% (n=11) |
| 8 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.0% hist -1.08–-0.13% · other way +0.06% (n=12) |
| 9 | Tech sector XLK 📈 chart | Equity | ▼ -1.0% hist -0.73–-0.1% · other way +0.09% (n=12) |
| 10 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +1.1% hist -0.42–+1.03% · other way -0.88% (n=12) |
| 11 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.8% hist -9.35–+2.78% · other way -1.04% (n=11) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.31–-0.17% · other way +0.04% (n=12) |
| 13 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▲ +0.8% hist +0.12–+0.6% · other way -0.73% (n=12) |
| 14 | Turkish lira TRY 📈 chart | FX | ▲ +0.9% hist +0.09–+0.94% · other way -0.6% (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 |
|---|---|---|---|---|---|---|
| KRW KRW | SHORT | -1.7% · 5d -0.0% | 71% | 32 | 0.40 | ⚠ differs |
| SOL SOL | SHORT | -8.6% · 5d -10.2% | 79% | 16 | 0.36 | ⚠ differs |
| CL CL | SHORT | -3.7% · 5d -1.6% | 74% | 33 | 0.35 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.5% · 5d -0.1% | 69% | 31 | 0.33 | ✓ matches cascade |
| SPX SPX | LONG | +0.0% · 5d +-0.0% ↺ fades | 66% | 39 | 0.29 | ⚠ differs |
| XHB XHB | SHORT | -1.1% · 5d -0.1% | 67% | 32 | 0.29 | ✓ matches cascade |
| Gold XAU | LONG | +0.7% · 5d +0.4% | 60% | 33 | 0.19 | ✓ matches cascade |
| SMH SMH | LONG | +1.3% · 5d -0.8% ↺ fades | 60% | 33 | 0.18 | ⚠ differs |
| MSTR MSTR | SHORT | -2.0% · 5d -3.0% | 60% | 33 | 0.17 | ⚠ differs |
| AMD AMD | SHORT | -0.2% · 5d -1.9% | 59% | 37 | 0.14 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -8bp · 5d -4bp | 57% | 38 | 0.13 | ⚠ differs |
| ASML ASML | SHORT | -2.1% · 5d -3.3% | 58% | 33 | 0.13 | ✓ matches cascade |
| USDJPY USDJPY | LONG | +0.4% · 5d -0.1% ↺ fades | 57% | 33 | 0.12 | ⚠ differs |
| AVGO AVGO | LONG | +2.3% · 5d -0.5% ↺ fades | 57% | 25 | 0.12 | ⚠ differs |