What if Fed misreads a productivity boom and over-eases into hot demand?
Mistaking AI-driven productivity gains for slack, the Fed cuts into accelerating demand, fuelling an inflationary melt-up that later forces a sharp reversal; breakevens and real yields whipsaw.
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. Mistaking AI-driven productivity gains for slack, the Fed cuts into accelerating demand, fuelling an inflationary melt-up that later forces a sharp reversal; breakevens and real yields whipsaw. The trigger decomposes into signed root‑shocks — Fed policy path ▼ · Growth surprise ▲ · Inflation expectations ▲ · Inflation surprise ▲ · 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 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.8% hist -1.48–+3.01% · other way +23.82% (n=3) |
| 2 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.7% hist -4.62–+6.0% · other way -2.78% (n=3) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.7% hist -1.73–+3.08% · other way -7.52% (n=9) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.6% model prior · unmeasured |
| 5 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.5% hist -0.27–+1.05% · other way +0.52% (n=10) |
| 6 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.4% hist -0.69–+0.08% · other way +5.59% (n=10) |
| 7 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.3% hist -0.13–+0.68% · other way -0.74% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -3.76–+2.22% · other way -15.0% (n=7) |
| 9 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.3% hist -2.11–+1.1% · other way +0.66% (n=9) |
| 10 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.4% hist -8.48–+4.3% · other way -1.92% (n=2) |
| 11 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +4bp hist -9.14–+18.88% · other way -5.8% (n=12) |
| 12 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +3bp hist -11.12–+21.32% · other way -7.8% (n=12) |
| 13 | High-yield credit HYG 📈 chart | Rate | ▲ +0.3% hist +0.0–+0.43% · other way +0.33% (n=8) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▲ +0.3% hist -1.88–+3.25% · other way +0.0% (n=9) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 10 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 | SHORT | -8.5% · 5d -0.1% | 100% | 4 | 0.58 | ⚠ differs |
| Bitcoin BTC | SHORT | -4.0% · 5d -3.2% | 86% | 7 | 0.49 | ⚠ differs |
| High-yield credit HYG | LONG | +0.2% · 5d -0.1% ↺ fades | 76% | 8 | 0.37 | ✓ matches cascade |
| SMH SMH | LONG | +3.2% · 5d +0.3% | 68% | 9 | 0.33 | ✓ matches cascade |
| Gold XAU | SHORT | -1.9% · 5d -0.8% | 68% | 9 | 0.30 | ✓ matches cascade |
| 30y yield DGS30 | LONG | +17bp · 5d +4bp | 67% | 10 | 0.28 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +20bp · 5d +6bp | 67% | 10 | 0.28 | ✓ matches cascade |
| US dollar DXY | SHORT | -0.0% · 5d -0.1% | 62% | 10 | 0.19 | · |
| NVDA NVDA | LONG | +3.6% · 5d -0.4% ↺ fades | 58% | 9 | 0.13 | ✓ matches cascade |
| Volatility VIX | SHORT | -0.4% · 5d -3.8% | 53% | 9 | 0.03 | ✓ matches cascade |
| SOL SOL | LONG | +2.2% · 5d -1.6% ↺ fades | 33% | 6 | 0.00 | ✓ matches cascade |
| ETH ETH | LONG | +5.7% · 5d +1.6% | 50% | 6 | 0.00 | ✓ matches cascade |
| MSTR MSTR | LONG | +2.6% · 5d -3.4% ↺ fades | 32% | 9 | 0.00 | ✓ matches cascade |
| NDX NDX | LONG | +0.7% · 5d -0.2% ↺ fades | 47% | 9 | 0.00 | ✓ matches cascade |