What if EM real-yield collapse as cuts outrun disinflation erodes carry?
Aggressive EM rate cuts ahead of falling inflation compress real yields, thinning the carry buffer and prompting foreigners to pare local-bond positions.
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. Aggressive EM rate cuts ahead of falling inflation compress real yields, thinning the carry buffer and prompting foreigners to pare local-bond positions. The trigger decomposes into signed root‑shocks — EM currencies ▼ · FX carry appetite ▼ · 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 | ▼ -0.7% hist -6.17–+1.6% · other way -0.51% (n=12) |
| 2 | Indian rupee INR 📈 chart | FX | ▼ -0.6% hist -0.77–+0.0% · other way -0.5% (n=12) |
| 3 | Chinese yuan CNY 📈 chart | FX | ▼ -0.3% hist -0.64–+0.02% · other way -0.63% (n=12) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -3bp hist -5.2–+0.47% · other way +3.5% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -4.67–+0.84% · other way -3.1% (n=10) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.3% model prior · unmeasured |
| 7 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.3% hist -0.42–+0.4% · other way +0.71% (n=12) |
| 8 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -3bp hist -5.68–+0.99% · other way +4.9% (n=12) |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.2% hist -7.52–+1.89% · other way +3.6% (n=11) |
| 10 | Tech sector XLK 📈 chart | Equity | ▲ +0.2% hist -0.06–+0.37% · other way +0.28% (n=12) |
| 11 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▼ -0.2% hist -0.34–+0.41% · other way +0.78% (n=12) |
| 12 | Aussie dollar AUD 📈 chart | FX | ▼ -0.2% hist -0.96–+0.21% · other way -1.4% (n=12) |
| 13 | Arm ARMon Hyperliquid 📈 chart | Equity | ▲ +0.2% hist -2.21–+0.69% · other way +4.01% (n=10) |
| 14 | Homebuilders XHB 📈 chart | Equity | ▲ +0.2% hist -0.72–+0.4% · other way -1.57% (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 |
|---|---|---|---|---|---|---|
| CNY CNY | SHORT | -0.4% · 5d -0.4% | 71% | 32 | 0.36 | ✓ matches cascade |
| SOL SOL | SHORT | -3.9% · 5d -8.4% | 71% | 25 | 0.31 | ✓ matches cascade |
| TRY TRY | SHORT | -5.3% · 5d -0.6% | 62% | 32 | 0.24 | ✓ matches cascade |
| ETH ETH | SHORT | -6.5% · 5d -6.5% | 67% | 26 | 0.23 | ✓ matches cascade |
| AUD AUD | SHORT | -0.8% · 5d -0.8% | 62% | 32 | 0.22 | ✓ matches cascade |
| ARM ARM | SHORT | -2.0% · 5d -6.5% | 65% | 21 | 0.22 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.2% · 5d -0.1% | 64% | 32 | 0.22 | · |
| INR INR | SHORT | -0.5% · 5d -0.1% | 60% | 32 | 0.18 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -2.9% · 5d -3.6% | 61% | 30 | 0.15 | · |
| Volatility VIX | LONG | +2.2% · 5d -0.2% ↺ fades | 58% | 39 | 0.13 | · |
| 30y yield DGS30 | SHORT | -3bp · 5d 0bp | 56% | 40 | 0.09 | ✓ matches cascade |
| XHB XHB | SHORT | -0.8% · 5d -1.6% | 56% | 32 | 0.09 | ⚠ differs |
| 10y yield DGS10 | SHORT | -4bp · 5d 0bp | 51% | 40 | 0.01 | ✓ matches cascade |
| Gold XAU | SHORT | -0.6% · 5d -1.0% | 49% | 33 | 0.00 | ⚠ differs |