What if India overshoots its deficit target and spooks bond markets?
India fiscal slippage on subsidies is a local rupee-bond and INR event — the cleanest read is wider INR govvie yields and a softer rupee, with global crypto/equity spillover negligible despite the modeled cascade. Rhymes with the 2013 taper-tantrum when India's twin deficits made the rupee one of the 'Fragile Five' casualties. India funds its deficit largely domestically and via FPI flows; the forward angle is that index-inclusion (JPMorgan GBI-EM) inflows now cushion the bond market, so the slippage bites INR more than yields versus 2013 — the crypto-heavy cascade overstates the global linkage.
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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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. New Delhi blows past its deficit target on subsidies, spooking the rupee bond market. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · EM currencies ▼ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.