What if the ECB imposes an explicit ceiling on Bund yields?
An explicit Bund-yield cap is ECB capitulation to a disorderly selloff: it caps the long end, steepens via suppressed reals, weakens the euro and bids risk and gold — classic financial-repression. The template is BOJ's 2016 YCC, which pinned JGBs, weakened the yen and supported risk for years. Forward: capping the euro-bloc's benchmark with no JGB-style captive domestic base invites a speculative test of the ceiling, as 2022-23 YCC attacks showed.
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 6–18 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-on shock. The ECB imposes an explicit cap on Bund yields to fight a disorderly selloff, breaking decades of orthodoxy. The trigger decomposes into signed root‑shocks — Fed policy path ▼ · Inflation expectations ▲ — which propagate through our causal graph to the markets below.