What if the Fed caps long-end yields with yield-curve control?
Long-end cap: YCC to suppress surging long yields rallies the 30y/10y, lifts duration-sensitive tech and gold (a real-rate asset), and eases mortgage rates. The rhyme is BOJ's 2016-2022 YCC regime and the 1940s Fed peg — capping yields supported duration but at the cost of currency/balance-sheet stress. Forward angle: pinning the long end with inflation un-anchored risks a weaker dollar and a steeper breakeven curve, so the durable trade pairs long duration/gold with short USD — the catch is YCC works until the market tests the cap, then the defense balloons the balance sheet.
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 1–3 years 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 announces yield-curve control to cap surging long-end yields. The trigger decomposes into signed root‑shocks — Fed policy path ▼ · Real yields ▼ — 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 | ▲ +1.6% hist -0.31–+0.87% · other way +0.05% (n=12) |
| 2 | Tech sector XLK 📈 chart | Equity | ▲ +1.4% hist +0.32–+1.06% · other way -0.8% (n=12) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +1.1% hist +0.33–+0.84% · other way -1.08% (n=12) |
| 4 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.9% hist -0.4–+0.86% · other way +2.99% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +1.0% hist -14.43–+18.08% · other way -13.56% (n=12) |
| 6 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -9bp hist -8.2–-1.76% · other way +19.9% (n=12) |
| 7 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.9% hist -6.83–+2.65% · other way -5.34% (n=12) |
| 8 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -8bp hist -8.61–-1.38% · other way +19.7% (n=12) |
| 9 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.8% model prior · unmeasured |
| 10 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.7% hist -1.51–+2.33% · other way -6.99% (n=12) |
| 11 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.6% hist -2.94–+3.04% · other way +1.45% (n=12) |
| 12 | Arm ARMon Hyperliquid 📈 chart | Equity | ▲ +0.5% hist -9.71–+5.39% · other way -8.05% (n=4) |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▲ +0.5% hist -0.34–+0.48% · other way +0.67% (n=12) |
| 14 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.5% hist -0.27–+1.75% · other way -1.32% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade: VIX's +7.7% history clusters on 2020 COVID crash windows and HOOD/COIN/XHB analogues are crisis-regime selloffs, not YCC-relief tapes — history is regime-biased, fade it.
Historical precedent — what analogous events actually did
Across 32 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 | -9.9% · 5d -9.7% | 100% | 3 | 0.59 | ⚠ differs |
| Bitcoin BTC | SHORT | -6.6% · 5d -2.6% | 79% | 14 | 0.42 | ⚠ differs |
| HOOD HOOD | SHORT | -9.6% · 5d -3.5% | 75% | 4 | 0.40 | ⚠ differs |
| COIN COIN | SHORT | -3.7% · 5d +2.0% ↺ fades | 75% | 4 | 0.33 | ⚠ differs |
| SPX SPX | LONG | +1.4% · 5d +0.5% | 66% | 32 | 0.28 | ✓ matches cascade |
| AVGO AVGO | SHORT | -1.3% · 5d -1.8% | 67% | 21 | 0.27 | ⚠ differs |
| MSTR MSTR | SHORT | -0.8% · 5d -3.1% | 62% | 32 | 0.21 | ⚠ differs |
| QCOM QCOM | SHORT | -0.8% · 5d -1.3% | 66% | 32 | 0.21 | ⚠ differs |
| Volatility VIX | SHORT | -1.2% · 5d -3.2% | 62% | 32 | 0.20 | ✓ matches cascade |
| TSM TSM | LONG | +1.0% · 5d -1.4% ↺ fades | 62% | 32 | 0.20 | ✓ matches cascade |
| AUD AUD | LONG | +0.4% · 5d +0.4% | 61% | 28 | 0.18 | ✓ matches cascade |
| ASML ASML | SHORT | -0.4% · 5d -1.0% | 59% | 32 | 0.17 | ⚠ differs |
| SOL SOL | LONG | +18.5% · 5d +1.8% | 57% | 7 | 0.12 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -3bp · 5d -7bp | 56% | 32 | 0.11 | ✓ matches cascade |
Why this probability
Fed YCC never deployed; extreme last-resort tool; very low even over 3yr. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.