What if Labor-supply normalization breaks the US wage-price loop (good)?
Renewed labor inflows and rising participation normalize the US labor market, breaking the wage-price feedback loop; cooling services inflation lets the Fed ease and supports a durable risk-on backdrop.
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-on shock. Renewed labor inflows and rising participation normalize the US labor market, breaking the wage-price feedback loop; cooling services inflation lets the Fed ease and supports a durable risk-on backdrop. The trigger decomposes into signed root‑shocks — Fed policy path ▼ · Inflation expectations ▼ · Labor surplus ▲ · Risk appetite ▲ — which propagate through our causal graph to the markets below.