What if the Fed signals higher rates for longer?
Hawkish repricing: a higher-for-longer pause lifts front-end and real yields, bids DXY on rate differentials, and weighs modestly on growth/tech. Rhyme is the 2023 Q3-Q4 'higher for longer' episode, when 2y/10y backed up, the dollar firmed, and the Nasdaq corrected before the December dovish pivot reversed it. Transmission: a stronger dollar tightens global conditions and pressures EM/rate-sensitive FX; forward angle — with cuts already priced, the surprise is modest, so this is a fade-the-rate-cut-hope grind, not a regime break; the cleanest trade is short front-end / long USD.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. The Fed signals a prolonged pause / higher-for-longer, dashing rate-cut hopes. The trigger decomposes into signed root‑shocks — Fed policy path ▲ — which propagate through our causal graph to the markets below.