What if Fed adopts nominal-GDP targeting, overhauling the reaction function?
A regime shift to nominal-GDP-level targeting changes how the Fed responds to shocks, tolerating more inflation in downturns; breakevens and the curve steepen as the framework is digested.
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-on shock. A regime shift to nominal-GDP-level targeting changes how the Fed responds to shocks, tolerating more inflation in downturns; breakevens and the curve steepen as the framework is digested. The trigger decomposes into signed root‑shocks — Gold ▲ · Yield-curve slope ▲ · Fed policy path ▼ · Inflation expectations ▲ · 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 | ▲ +0.6% hist -1.78–+3.0% · other way -3.09% (n=11) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.5% hist -1.67–+2.68% · other way +14.08% (n=7) |
| 3 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.4% model prior · unmeasured |
| 4 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.4% hist -4.81–+5.69% · other way -2.55% (n=7) |
| 5 | Financials XLF 📈 chart | Equity | ▲ +0.3% hist -0.69–+1.52% · other way -1.17% (n=11) |
| 6 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.3% hist -0.34–+0.95% · other way +0.29% (n=12) |
| 7 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -3.74–+2.23% · other way -10.53% (n=10) |
| 8 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.3% hist -1.61–+1.4% · other way +1.25% (n=11) |
| 9 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.3% hist -8.52–+4.28% · other way +13.29% (n=6) |
| 10 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.2% hist -0.56–+0.16% · other way +10.8% (n=12) |
| 11 | Tech sector XLK 📈 chart | Equity | ▲ +0.3% hist -0.98–+1.52% · other way +0.43% (n=11) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.2% hist -0.19–+0.57% · other way -0.31% (n=12) |
| 13 | High-yield credit HYG 📈 chart | Rate | ▲ +0.2% hist -0.03–+0.36% · other way +0.36% (n=10) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 10 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 |
|---|---|---|---|---|---|---|
| COIN COIN | SHORT | -8.5% · 5d -0.1% | 100% | 4 | 0.58 | ⚠ differs |
| Bitcoin BTC | SHORT | -4.0% · 5d -3.2% | 86% | 7 | 0.49 | ⚠ differs |
| High-yield credit HYG | LONG | +0.2% · 5d -0.1% ↺ fades | 76% | 8 | 0.37 | ✓ matches cascade |
| XLF XLF | LONG | +1.3% · 5d -0.6% ↺ fades | 68% | 9 | 0.30 | ✓ matches cascade |
| Gold XAU | SHORT | -1.9% · 5d -0.8% | 68% | 9 | 0.30 | ⚠ differs |
| 10y yield DGS10 | LONG | +20bp · 5d +6bp | 67% | 10 | 0.28 | · |
| US dollar DXY | SHORT | -0.0% · 5d -0.1% | 62% | 10 | 0.19 | · |
| Volatility VIX | SHORT | -0.4% · 5d -3.8% | 53% | 9 | 0.03 | ✓ matches cascade |
| MSTR MSTR | LONG | +2.6% · 5d -3.4% ↺ fades | 32% | 9 | 0.00 | ✓ matches cascade |
| SOL SOL | LONG | +2.2% · 5d -1.6% ↺ fades | 33% | 6 | 0.00 | ✓ matches cascade |
| ETH ETH | LONG | +5.7% · 5d +1.6% | 50% | 6 | 0.00 | ✓ matches cascade |
| NDX NDX | LONG | +0.7% · 5d -0.2% ↺ fades | 47% | 9 | 0.00 | ✓ matches cascade |
| XLK XLK | LONG | +1.4% · 5d +0.9% | 42% | 9 | 0.00 | ✓ matches cascade |
| SPX SPX | LONG | +0.4% · 5d +0.4% | 43% | 10 | 0.00 | ✓ matches cascade |