What if EM real-rate cushion erodes as inflation reaccelerates?
A fresh inflation acceleration erodes EM real-rate cushions, prompting carry-trade unwinds that weaken currencies and steepen local curves.
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 risk-off shock. A fresh inflation acceleration erodes EM real-rate cushions, prompting carry-trade unwinds that weaken currencies and steepen local curves. The trigger decomposes into signed root‑shocks — EM currencies ▼ · FX carry appetite ▼ · Inflation surprise ▲ · 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 | ▼ -0.8% hist -7.9–+2.65% · other way +0.27% (n=12) |
| 2 | Indian rupee INR 📈 chart | FX | ▼ -0.7% hist -1.13–+0.1% · other way -0.35% (n=12) |
| 3 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -3.32–+2.89% · other way -2.88% (n=9) |
| 4 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.39–-0.13% · other way +0.45% (n=12) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -7.01–+2.14% · other way +13.43% (n=12) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.5% model prior · unmeasured |
| 7 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -6.02–+3.21% · other way -1.48% (n=10) |
| 8 | Chinese yuan CNY 📈 chart | FX | ▼ -0.4% hist -0.88–+0.09% · other way -0.33% (n=12) |
| 9 | Tech sector XLK 📈 chart | Equity | ▼ -0.4% hist -0.25–-0.13% · other way +0.69% (n=12) |
| 10 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.3% hist -0.15–+0.83% · other way -11.43% (n=12) |
| 11 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -2.95–+1.61% · other way +5.05% (n=11) |
| 12 | Aussie dollar AUD 📈 chart | FX | ▼ -0.2% hist -1.36–+0.33% · other way -1.77% (n=12) |
| 13 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +2bp hist -1.53–+1.83% · other way -6.7% (n=12) |
| 14 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +2bp hist -3.21–+2.63% · other way -7.2% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 37 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 |
|---|---|---|---|---|---|---|
| CNY CNY | SHORT | -0.6% · 5d -0.4% | 70% | 18 | 0.37 | ✓ matches cascade |
| AUD AUD | SHORT | -1.1% · 5d -0.8% | 68% | 18 | 0.29 | ✓ matches cascade |
| ETH ETH | SHORT | -5.8% · 5d -8.2% | 70% | 11 | 0.27 | ✓ matches cascade |
| TRY TRY | SHORT | -7.0% · 5d -0.9% | 62% | 18 | 0.23 | ✓ matches cascade |
| MSTR MSTR | SHORT | -6.2% · 5d -5.5% | 61% | 20 | 0.16 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -2bp · 5d -2bp | 58% | 35 | 0.14 | ⚠ differs |
| Gold XAU | SHORT | -1.9% · 5d -1.8% | 59% | 19 | 0.14 | · |
| Volatility VIX | LONG | +0.6% · 5d +4.6% | 58% | 28 | 0.13 | ✓ matches cascade |
| INR INR | SHORT | -0.7% · 5d -0.0% | 57% | 18 | 0.12 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -4bp · 5d -3bp | 55% | 37 | 0.08 | ⚠ differs |
| NDX NDX | SHORT | -0.1% · 5d -0.6% | 54% | 30 | 0.07 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -2.8% · 5d -5.9% | 55% | 15 | 0.07 | ✓ matches cascade |
| SOL SOL | LONG | +3.6% · 5d -9.0% ↺ fades | 53% | 9 | 0.04 | ⚠ differs |
| XLK XLK | LONG | +0.0% · 5d -0.9% ↺ fades | 44% | 19 | 0.00 | ⚠ differs |