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.
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. 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.
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 | ▼ -2.0% hist -3.74–+0.31% · other way +14.34% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.7% hist -7.44–+5.2% · other way +5.04% (n=10) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.5% hist -1.24–-0.42% · other way +0.07% (n=12) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.3% model prior · unmeasured |
| 5 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.2% hist -3.3–+1.15% · other way +6.67% (n=10) |
| 6 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -1.1% hist -6.64–+3.38% · other way +0.91% (n=10) |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +1.1% hist -1.11–+4.07% · other way -4.32% (n=12) |
| 8 | Tech sector XLK 📈 chart | Equity | ▼ -1.1% hist -0.82–-0.16% · other way +0.39% (n=12) |
| 9 | High-yield credit HYG 📈 chart | Rate | ▼ -1.0% hist -0.89–-0.15% · other way -0.31% (n=12) |
| 10 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.9% hist -1.8–+0.27% · other way +1.5% (n=12) |
| 11 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -4.22–+6.94% · other way +12.41% (n=8) |
| 12 | Financials XLF 📈 chart | Equity | ▼ -0.6% hist -0.97–+0.04% · other way +0.86% (n=12) |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -0.69–+0.85% · other way +2.11% (n=12) |
| 14 | JPMorgan JPM 📈 chart | Equity | ▼ -0.4% hist -0.64–+0.04% · other way +0.97% (n=12) |
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 |
|---|---|---|---|---|---|---|
| COIN COIN | LONG | +7.4% · 5d +7.7% | 86% | 7 | 0.49 | ⚠ differs |
| MRVL MRVL | SHORT | -1.8% · 5d -3.5% | 72% | 29 | 0.38 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d +0.1% ↺ fades | 64% | 25 | 0.23 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -6.0% · 5d -4.5% | 64% | 11 | 0.21 | ✓ matches cascade |
| JPM JPM | SHORT | -0.4% · 5d -1.6% | 62% | 34 | 0.20 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.4% · 5d -0.1% | 61% | 28 | 0.20 | ✓ matches cascade |
| MSTR MSTR | SHORT | -2.5% · 5d -2.8% | 62% | 29 | 0.19 | ✓ matches cascade |
| ETH ETH | SHORT | -2.4% · 5d -4.5% | 62% | 8 | 0.16 | ✓ matches cascade |
| AUD AUD | SHORT | -0.7% · 5d -0.1% | 57% | 28 | 0.13 | ✓ matches cascade |
| US dollar DXY | LONG | +0.7% · 5d +0.2% | 56% | 36 | 0.10 | ✓ matches cascade |
| TRY TRY | LONG | +0.5% · 5d +0.7% | 57% | 28 | 0.10 | ⚠ differs |
| Volatility VIX | LONG | +3.3% · 5d +2.4% | 55% | 31 | 0.09 | ✓ matches cascade |
| XLF XLF | SHORT | -0.6% · 5d -1.2% | 55% | 29 | 0.09 | ✓ matches cascade |
| SMH SMH | LONG | +1.1% · 5d -1.0% ↺ fades | 55% | 29 | 0.09 | ⚠ differs |