What if Labor-market break: layoffs cascade as the Sahm rule triggers?
Unemployment rises enough to trigger the Sahm rule, signaling recession as layoffs cascade through cyclical sectors; credit spreads widen and equities de-rate.
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 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. 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-off shock. Unemployment rises enough to trigger the Sahm rule, signaling recession as layoffs cascade through cyclical sectors; credit spreads widen and equities de-rate. The trigger decomposes into signed root‑shocks — Consumer spending ▼ · Credit spreads ▲ · Labor surplus ▲ · Recession signal ▲ · Risk appetite ▼ — 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 | ▼ -1.5% hist -6.32–+1.05% · other way +15.45% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.2% hist -11.0–+6.66% · other way -13.98% (n=11) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.9% hist -0.89–-0.2% · other way +0.21% (n=12) |
| 4 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.9% hist -1.18–+3.6% · other way -10.38% (n=12) |
| 5 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.9% model prior · unmeasured |
| 6 | High-yield credit HYG 📈 chart | Rate | ▼ -0.9% hist -0.78–-0.16% · other way -0.38% (n=12) |
| 7 | Financials XLF 📈 chart | Equity | ▼ -0.8% hist -0.86–-0.14% · other way -0.76% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -3.99–+2.05% · other way +1.56% (n=11) |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -5.83–+3.62% · other way -4.02% (n=11) |
| 10 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -2.02–+0.52% · other way +1.61% (n=12) |
| 11 | Tech sector XLK 📈 chart | Equity | ▼ -0.7% hist -0.65–+0.38% · other way +0.37% (n=12) |
| 12 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.17–+0.43% · other way +7.8% (n=11) |
| 13 | JPMorgan JPM 📈 chart | Equity | ▼ -0.5% hist -0.34–-0.11% · other way -0.51% (n=12) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -0.84–+2.23% · other way +0.42% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 38 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 |
|---|---|---|---|---|---|---|
| AVGO AVGO | LONG | +4.8% · 5d +0.0% | 67% | 18 | 0.31 | ⚠ differs |
| SOL SOL | SHORT | -10.6% · 5d -10.6% | 71% | 7 | 0.29 | ✓ matches cascade |
| MSTR MSTR | SHORT | -5.0% · 5d -3.6% | 67% | 27 | 0.25 | ✓ matches cascade |
| CL CL | SHORT | -2.6% · 5d -2.5% | 67% | 27 | 0.25 | ✓ matches cascade |
| SMH SMH | LONG | +2.2% · 5d -0.8% ↺ fades | 63% | 27 | 0.22 | ⚠ differs |
| ETH ETH | SHORT | -5.5% · 5d -4.7% | 62% | 8 | 0.17 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -3.5% · 5d -4.5% | 60% | 10 | 0.16 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -8bp · 5d -4bp | 58% | 38 | 0.16 | · |
| High-yield credit HYG | SHORT | -0.3% · 5d +0.1% ↺ fades | 58% | 24 | 0.13 | ✓ matches cascade |
| COIN COIN | LONG | +0.8% · 5d +5.6% | 57% | 7 | 0.11 | ⚠ differs |
| MU MU | LONG | +2.5% · 5d -3.5% ↺ fades | 57% | 30 | 0.11 | ⚠ differs |
| Gold XAU | SHORT | -0.4% · 5d -0.4% | 56% | 27 | 0.10 | · |
| US dollar DXY | LONG | +0.6% · 5d +0.2% | 55% | 38 | 0.08 | · |
| SPX SPX | SHORT | -1.6% · 5d -0.6% | 53% | 38 | 0.06 | ✓ matches cascade |