What if the US freezes Iraq's dollar auctions over Iran flows?
US Treasury curbing Iraqi dollar auctions over Iran flows spikes the dinar's parallel rate and import costs — a sanctions-driven local FX squeeze; the cascade's large VIX/equity move overstates the global read. Rhymes with the late-2022/2023 Fed-Treasury crackdown on Iraqi dollar smuggling that widened the parallel spread. The US controls Iraq's dollar lifeline via the NY Fed account; the novel angle is that compliance pressure forces Baghdad to choose between dollar access and Iranian trade ties.
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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. US Treasury curbs Iraqi central-bank dollar auctions over Iran flows, spiking the dinar's parallel rate and import costs. The trigger decomposes into signed root‑shocks — Geopolitical risk ▲ · Inflation surprise ▲ — which propagate through our causal graph to the markets below.