What if investment-grade and high-yield spreads widen together in a systemic shock?
IG and HY spreads widen together as a systemic shock overrides quality distinctions, the breakdown in credit-quality diversification that marks acute stress episodes.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. IG and HY spreads widen together as a systemic shock overrides quality distinctions, the breakdown in credit-quality diversification that marks acute stress episodes. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Credit spreads ▲ · Recession signal ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.