What if a multi-hour Fedwire outage gridlocks dollar payments?
An extended Fedwire outage gridlocks large-value dollar settlement — interbank payments, repo unwinds, and Treasury issuance all freeze, the deepest plumbing tail on the list. Rhymes with the multi-hour 2009 Fedwire outage and the broader 1985 BoNY $23bn settlement failure that required a Fed discount-window rescue. Forward angle: there is no substitute rail for Fedwire — a long outage forces the Fed to extend hours/credit; the hedge is long vol and front-end dislocation, and the snap-back is sharp once it reopens.
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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 (electric blue) over time vs the market's (Polymarket, amber), from the past toward the Tail risk 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. An extended Fedwire failure halts large-value dollar settlement, gridlocking interbank payments, repo unwinds, and Treasury issuance. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.