What if Fed holds too long: restrictive policy tips the US into a hard landing?
The FOMC keeps the funds rate restrictive past the point of labor-market cracking, and a sharp payrolls deterioration confirms an over-tightening error as the curve dis-inverts violently into recession.
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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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. The FOMC keeps the funds rate restrictive past the point of labor-market cracking, and a sharp payrolls deterioration confirms an over-tightening error as the curve dis-inverts violently into recession. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Yield-curve slope ▲ · Fed policy path ▲ · Recession signal ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.