What if the Fed quietly expands its balance sheet?
Fed 'reserve-management' UST buying reads as stealth-QE: risk-on across high-beta tech and crypto, VIX and credit spreads compress, front-end yields ease. The template is the Oct-2019 'not-QE' bill-buying that markets treated as liquidity and rode into the early-2020 melt-up. Forward angle: with the balance sheet still large, the liquidity impulse per dollar is smaller than 2019, so the equity beta may underdeliver versus the pure-signal reaction.
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 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. 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. The Fed restarts Treasury purchases framed as 'reserve management,' a stealth-QE move that markets read as backdoor monetary easing. The trigger decomposes into signed root‑shocks — Fed policy path ▼ · 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 | ▲ +2.4% hist -5.34–+15.15% · other way -2.15% (n=11) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +2.1% hist -3.8–+10.33% · other way +14.52% (n=9) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +1.7% hist +0.34–+1.64% · other way +0.57% (n=12) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +1.6% model prior · unmeasured |
| 5 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +1.5% hist -0.05–+2.18% · other way +0.06% (n=9) |
| 6 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.4% hist +0.1–+1.77% · other way -4.46% (n=10) |
| 7 | Tech sector XLK 📈 chart | Equity | ▲ +1.4% hist +0.09–+1.8% · other way +0.39% (n=11) |
| 8 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -1.0% hist -1.54–+2.01% · other way +6.8% (n=12) |
| 9 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.9% hist -0.16–+2.0% · other way -3.21% (n=12) |
| 10 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.9% hist -3.62–+8.42% · other way +18.49% (n=8) |
| 11 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▲ +0.7% hist -0.33–+2.08% · other way -0.5% (n=11) |
| 12 | High-yield credit HYG 📈 chart | Rate | ▲ +0.6% hist -0.14–+0.33% · other way +0.14% (n=10) |
| 13 | Financials XLF 📈 chart | Equity | ▲ +0.5% hist -0.07–+0.42% · other way -0.25% (n=11) |
| 14 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -0.33–-0.11% · other way +0.65% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade's LONG on ARM: the -17% RBI-cut and palladium analogues are a thin n=8 off-channel grab; stealth-QE is a direct duration-easing bid for long-duration AI names like ARM.
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 |
|---|---|---|---|---|---|---|
| ARM ARM | SHORT | -0.2% · 5d -7.6% | 71% | 13 | 0.35 | ⚠ differs |
| SPX SPX | LONG | +1.4% · 5d +0.9% | 67% | 40 | 0.32 | ✓ matches cascade |
| QCOM QCOM | SHORT | -1.7% · 5d -1.5% | 71% | 40 | 0.30 | ⚠ differs |
| TSM TSM | LONG | +3.0% · 5d -0.9% ↺ fades | 64% | 40 | 0.26 | ✓ matches cascade |
| SMH SMH | LONG | +1.6% · 5d -0.2% ↺ fades | 62% | 40 | 0.22 | ✓ matches cascade |
| JPM JPM | LONG | +1.1% · 5d -0.2% ↺ fades | 62% | 40 | 0.21 | ✓ matches cascade |
| INTC INTC | SHORT | -1.3% · 5d -1.5% | 62% | 40 | 0.21 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.3% · 5d +0.0% ↺ fades | 63% | 39 | 0.19 | ⚠ differs |
| 10y yield DGS10 | LONG | +7bp · 5d +0bp | 62% | 40 | 0.19 | ⚠ differs |
| EURUSD EURUSD | LONG | +0.3% · 5d +0.2% | 63% | 39 | 0.19 | ✓ matches cascade |
| MRVL MRVL | LONG | +4.7% · 5d -1.6% ↺ fades | 58% | 40 | 0.14 | ✓ matches cascade |
| Gold XAU | SHORT | -0.5% · 5d -0.5% | 58% | 40 | 0.13 | ⚠ differs |
| MU MU | LONG | +2.0% · 5d -1.2% ↺ fades | 58% | 40 | 0.13 | ✓ matches cascade |
| INR INR | SHORT | -0.2% · 5d -0.1% | 58% | 39 | 0.12 | ⚠ differs |
Why this probability
Reserve-management Treasury buys already mooted as QT ends; stealth-QE read very plausible 2026. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.