What if EM real-rate compression rally as inflation falls faster than rates?
Disinflation outpaces rate cuts across EM, so high real yields draw inflows even as nominal rates ease, rallying local bonds and lifting the currencies.
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 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. 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 mixed shock. Disinflation outpaces rate cuts across EM, so high real yields draw inflows even as nominal rates ease, rallying local bonds and lifting the currencies. The trigger decomposes into signed root‑shocks — EM currencies ▲ · FX carry appetite ▲ · Inflation expectations ▼ · 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 | Turkish lira TRY 📈 chart | FX | ▲ +0.9% hist -4.89–+1.19% · other way +0.07% (n=5) |
| 2 | Indian rupee INR 📈 chart | FX | ▲ +0.7% hist -0.39–+0.5% · other way +0.53% (n=5) |
| 3 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.6% hist -5.31–+1.24% · other way +5.4% (n=4) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.5% model prior · unmeasured |
| 5 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.4% hist -8.74–+2.15% · other way +5.26% (n=4) |
| 6 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.4% hist +0.01–+0.52% · other way -1.13% (n=9) |
| 7 | Chinese yuan CNY 📈 chart | FX | ▲ +0.4% hist -0.18–+0.15% · other way +0.26% (n=5) |
| 8 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.4% hist -8.31–+2.1% · other way +16.54% (n=5) |
| 9 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.3% hist -1.49–+0.53% · other way +1.52% (n=8) |
| 10 | Aussie dollar AUD 📈 chart | FX | ▲ +0.3% hist -0.81–+0.35% · other way -0.2% (n=5) |
| 11 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.2% hist -3.97–+1.31% · other way +7.87% (n=4) |
| 12 | Tech sector XLK 📈 chart | Equity | ▲ +0.2% hist -0.26–+0.76% · other way -1.01% (n=5) |
| 13 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▲ +0.2% hist -0.11–+0.44% · other way -1.29% (n=5) |
| 14 | 2y Treasury yield DGS2 | Rate | ▼ -1bp model prior · unmeasured |
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 |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -4.7% · 5d -9.6% | 76% | 18 | 0.40 | ⚠ differs |
| TRY TRY | SHORT | -4.4% · 5d -0.3% | 69% | 30 | 0.38 | ⚠ differs |
| CNY CNY | SHORT | -0.3% · 5d -0.4% | 71% | 30 | 0.32 | ⚠ differs |
| MSTR MSTR | SHORT | -7.4% · 5d -4.6% | 68% | 32 | 0.28 | ⚠ differs |
| ETH ETH | SHORT | -7.7% · 5d -6.6% | 69% | 20 | 0.27 | ⚠ differs |
| AUD AUD | SHORT | -0.8% · 5d -1.1% | 63% | 30 | 0.22 | ⚠ differs |
| Bitcoin BTC | SHORT | -3.7% · 5d -3.4% | 63% | 26 | 0.20 | ⚠ differs |
| INR INR | SHORT | -0.7% · 5d -0.2% | 59% | 30 | 0.18 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.2% · 5d +0.0% ↺ fades | 59% | 30 | 0.14 | · |
| 10y yield DGS10 | SHORT | -7bp · 5d +0bp | 54% | 39 | 0.06 | · |
| XLK XLK | LONG | +0.6% · 5d -0.5% ↺ fades | 51% | 31 | 0.02 | ✓ matches cascade |
| USDJPY USDJPY | LONG | +0.3% · 5d +0.2% | 51% | 35 | 0.01 | ✓ matches cascade |
| NDX NDX | LONG | +0.3% · 5d -0.7% ↺ fades | 46% | 39 | 0.00 | ✓ matches cascade |
| Volatility VIX | SHORT | -1.3% · 5d -3.8% | 46% | 38 | 0.00 | ✓ matches cascade |