What if Fed's preferred PCE undershoots, greenlighting a cutting cycle?
A cooler-than-expected core-PCE run validates the disinflation thesis and clears the path for cuts, rallying duration and risk while the dollar softens on the dovish confirmation.
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. A cooler-than-expected core-PCE run validates the disinflation thesis and clears the path for cuts, rallying duration and risk while the dollar softens on the dovish confirmation. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▼ · Credit spreads ▼ · Fed policy path ▼ · Inflation expectations ▼ · 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 | ▲ +1.5% hist -4.83–+12.28% · other way -5.64% (n=7) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +1.1% hist -2.62–+6.72% · other way +8.57% (n=6) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +1.1% hist +0.26–+0.63% · other way +0.42% (n=8) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.9% model prior · unmeasured |
| 5 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.9% hist -1.02–+4.24% · other way -3.83% (n=7) |
| 6 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.8% hist -0.85–+2.8% · other way -3.78% (n=7) |
| 7 | Tech sector XLK 📈 chart | Equity | ▲ +0.9% hist +0.27–+0.65% · other way +0.3% (n=7) |
| 8 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.7% hist -1.88–+0.34% · other way -11.0% (n=7) |
| 9 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.7% hist -0.5–-0.02% · other way +1.66% (n=12) |
| 10 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.6% hist +0.09–+0.53% · other way -1.32% (n=7) |
| 11 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.6% hist -0.43–+0.53% · other way -2.49% (n=7) |
| 12 | High-yield credit HYG 📈 chart | Rate | ▲ +0.5% hist -0.19–+0.36% · other way -0.73% (n=7) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.5% hist -0.11–+2.32% · other way -3.75% (n=12) |
| 14 | Turkish lira TRY 📈 chart | FX | ▲ +0.5% hist -1.15–+0.96% · other way +1.16% (n=7) |
Probable recommendation
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 |
|---|---|---|---|---|---|---|
| SPX SPX | LONG | +1.7% · 5d +0.6% | 77% | 39 | 0.46 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +15bp · 5d +1bp | 71% | 39 | 0.34 | ⚠ differs |
| ARM ARM | SHORT | -1.4% · 5d -7.8% | 69% | 15 | 0.31 | ⚠ differs |
| JPM JPM | LONG | +2.1% · 5d -0.4% ↺ fades | 69% | 39 | 0.31 | ✓ matches cascade |
| 30y yield DGS30 | LONG | +12bp · 5d +0bp | 69% | 39 | 0.30 | ⚠ differs |
| USDJPY USDJPY | LONG | +0.9% · 5d +0.5% | 65% | 39 | 0.23 | ⚠ differs |
| TSM TSM | LONG | +2.5% · 5d -0.6% ↺ fades | 62% | 39 | 0.22 | ✓ matches cascade |
| EURUSD EURUSD | LONG | +0.2% · 5d +0.0% | 62% | 36 | 0.19 | ✓ matches cascade |
| KRW KRW | SHORT | -0.4% · 5d -0.0% | 62% | 36 | 0.18 | ⚠ differs |
| ETH ETH | LONG | +3.5% · 5d -3.5% ↺ fades | 61% | 33 | 0.17 | ✓ matches cascade |
| INR INR | SHORT | -0.1% · 5d +0.1% ↺ fades | 62% | 36 | 0.17 | ⚠ differs |
| Volatility VIX | SHORT | -1.4% · 5d -3.8% | 60% | 39 | 0.15 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d -0.1% | 60% | 35 | 0.14 | ⚠ differs |
| GBPUSD GBPUSD | LONG | +0.1% · 5d +0.0% | 60% | 36 | 0.14 | ✓ matches cascade |