What if Fed forward-guidance error wrong-foots the entire rates market?
A guidance signal that data swiftly contradicts forces an abrupt about-face, spiking rate volatility and term premium as markets lose confidence in the Fed's communicated path.
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 guidance signal that data swiftly contradicts forces an abrupt about-face, spiking rate volatility and term premium as markets lose confidence in the Fed's communicated path. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Yield-curve slope ▲ · Dollar/reserve confidence ▼ · 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 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.53–-0.1% · other way -0.29% (n=12) |
| 2 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.7% hist -3.97–+2.14% · other way +3.18% (n=12) |
| 3 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.49–-0.04% · other way -0.38% (n=12) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +6bp hist +1.85–+3.77% · other way +14.1% (n=12) |
| 5 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.6% hist -0.51–+2.63% · other way -0.17% (n=12) |
| 6 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.6% hist +0.14–+0.38% · other way +24.57% (n=12) |
| 7 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +5bp hist -0.81–+4.38% · other way +14.7% (n=12) |
| 8 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.2–+0.16% · other way +0.18% (n=12) |
| 9 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.4% hist -0.53–+1.73% · other way +5.56% (n=12) |
| 10 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.4% hist -0.37–-0.08% · other way +0.7% (n=12) |
| 11 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.4% hist +0.12–+0.23% · other way -0.53% (n=12) |
| 12 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▲ +0.3% hist +0.06–+0.23% · other way -0.62% (n=12) |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.22–-0.06% · other way +2.4% (n=12) |
| 14 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▼ -0.3% hist -0.18–-0.09% · other way +1.6% (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 |
|---|---|---|---|---|---|---|
| XHB XHB | SHORT | -2.7% · 5d -1.7% | 79% | 36 | 0.49 | ✓ matches cascade |
| SPX SPX | LONG | +0.3% · 5d -0.6% ↺ fades | 66% | 39 | 0.31 | ⚠ differs |
| KRW KRW | LONG | +0.1% · 5d +0.5% | 67% | 36 | 0.26 | ✓ matches cascade |
| Gold XAU | LONG | +2.1% · 5d +0.2% | 65% | 36 | 0.25 | ✓ matches cascade |
| ARM ARM | SHORT | -4.4% · 5d -5.2% | 68% | 20 | 0.25 | ✓ matches cascade |
| COIN COIN | SHORT | -0.4% · 5d -1.1% | 61% | 25 | 0.20 | ⚠ differs |
| INR INR | SHORT | -0.2% · 5d +0.1% ↺ fades | 62% | 36 | 0.20 | ⚠ differs |
| GBPUSD GBPUSD | LONG | +0.1% · 5d -0.4% ↺ fades | 58% | 36 | 0.13 | ✓ matches cascade |
| TRY TRY | SHORT | -1.1% · 5d +0.9% ↺ fades | 56% | 36 | 0.10 | ⚠ differs |
| Volatility VIX | SHORT | -4.2% · 5d +4.8% ↺ fades | 54% | 36 | 0.08 | ⚠ differs |
| Bitcoin BTC | LONG | +1.5% · 5d -3.0% ↺ fades | 55% | 31 | 0.08 | ✓ matches cascade |
| US dollar DXY | SHORT | -0.1% · 5d +0.2% ↺ fades | 55% | 39 | 0.07 | ✓ matches cascade |
| MSTR MSTR | SHORT | -0.1% · 5d -2.3% | 52% | 36 | 0.03 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.1% · 5d -0.3% | 52% | 35 | 0.03 | · |