What if Fed-cut dollar downcycle reopens EM portfolio-inflow taps?
A decisive Fed easing cycle weakens the dollar and narrows real-rate gaps, reviving foreign demand for EM local bonds and equities and firming the FX basket.
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-on shock. A decisive Fed easing cycle weakens the dollar and narrows real-rate gaps, reviving foreign demand for EM local bonds and equities and firming the FX basket. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▼ · EM currencies ▲ · FX carry appetite ▲ · Credit spreads ▼ · 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 | ▲ +1.2% hist -7.6–+1.39% · other way -0.14% (n=10) |
| 2 | Indian rupee INR 📈 chart | FX | ▲ +1.0% hist -1.17–+0.61% · other way +0.65% (n=10) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +1.0% hist -8.87–+2.9% · other way +16.28% (n=11) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.7% hist +0.08–+0.65% · other way +24.08% (n=7) |
| 5 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.6% hist -1.2–+1.53% · other way +5.29% (n=8) |
| 6 | Chinese yuan CNY 📈 chart | FX | ▲ +0.6% hist -0.28–+0.21% · other way -0.48% (n=10) |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.6% model prior · unmeasured |
| 8 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.5% hist +0.07–+0.55% · other way +1.51% (n=11) |
| 9 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.5% hist -4.29–+1.62% · other way -5.98% (n=11) |
| 10 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.5% hist -5.83–+4.99% · other way +5.0% (n=8) |
| 11 | Aussie dollar AUD 📈 chart | FX | ▲ +0.5% hist -0.73–+0.56% · other way +1.13% (n=10) |
| 12 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -0.33–-0.13% · other way -0.51% (n=12) |
| 13 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.5% hist -0.89–+0.63% · other way +0.72% (n=10) |
| 14 | High-yield credit HYG 📈 chart | Rate | ▲ +0.4% hist -0.3–+0.29% · other way +1.38% (n=10) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 36 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 |
|---|---|---|---|---|---|---|
| TRY TRY | SHORT | -6.6% · 5d -0.7% | 78% | 18 | 0.53 | ⚠ differs |
| INR INR | SHORT | -1.4% · 5d -0.4% | 72% | 18 | 0.42 | ⚠ differs |
| CNY CNY | SHORT | -0.4% · 5d -0.4% | 78% | 18 | 0.42 | ⚠ differs |
| JPM JPM | SHORT | -3.0% · 5d -1.8% | 74% | 30 | 0.42 | ⚠ differs |
| SOL SOL | SHORT | -0.3% · 5d -5.7% | 75% | 8 | 0.39 | ⚠ differs |
| COIN COIN | SHORT | -5.1% · 5d -0.7% | 71% | 7 | 0.37 | ⚠ differs |
| AMD AMD | SHORT | -3.1% · 5d -3.3% | 70% | 30 | 0.37 | ⚠ differs |
| AVGO AVGO | LONG | +3.0% · 5d -1.2% ↺ fades | 71% | 17 | 0.37 | ✓ matches cascade |
| XLF XLF | SHORT | -0.1% · 5d -0.2% | 68% | 19 | 0.32 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.5% · 5d +0.0% ↺ fades | 67% | 18 | 0.26 | ⚠ differs |
| SPX SPX | LONG | +1.0% · 5d +0.6% | 64% | 33 | 0.24 | ✓ matches cascade |
| MSTR MSTR | SHORT | -8.3% · 5d -4.6% | 65% | 20 | 0.23 | ⚠ differs |
| MU MU | SHORT | -5.2% · 5d -4.1% | 61% | 30 | 0.21 | ⚠ differs |
| AUD AUD | SHORT | -0.9% · 5d -0.8% | 61% | 18 | 0.20 | ⚠ differs |