What if Late-cycle melt-up: easy policy plus FOMO stretches valuations?
Easing into still-solid growth combines with FOMO to stretch valuations in a late-cycle melt-up, exhilarating but raising the odds of a sharp eventual reset.
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 1–3 years 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-on shock. Easing into still-solid growth combines with FOMO to stretch valuations in a late-cycle melt-up, exhilarating but raising the odds of a sharp eventual reset. The trigger decomposes into signed root‑shocks — Credit spreads ▼ · Crypto liquidity ▲ · Financial conditions ▼ · Growth surprise ▲ · 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 | ▲ +1.9% hist -2.86–+8.3% · other way +3.65% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +1.8% hist -0.82–+4.02% · other way -3.99% (n=5) |
| 3 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +1.3% hist +0.24–+0.82% · other way -16.86% (n=6) |
| 4 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +1.1% model prior · unmeasured |
| 5 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +1.1% hist -0.22–+0.67% · other way +0.74% (n=12) |
| 6 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.1% hist +0.36–+0.75% · other way -15.85% (n=7) |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.9% hist -1.52–+2.47% · other way -0.05% (n=12) |
| 8 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.8% hist -3.87–+8.67% · other way +2.15% (n=5) |
| 9 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.7% hist +0.14–+0.5% · other way +0.62% (n=12) |
| 10 | Tech sector XLK 📈 chart | Equity | ▲ +0.7% hist -0.4–+0.38% · other way +0.54% (n=12) |
| 11 | High-yield credit HYG 📈 chart | Rate | ▲ +0.6% hist +0.1–+0.3% · other way +0.55% (n=12) |
| 12 | Financials XLF 📈 chart | Equity | ▲ +0.4% hist -0.17–+1.05% · other way -0.52% (n=12) |
| 13 | JPMorgan JPM 📈 chart | Equity | ▲ +0.3% hist -0.23–+2.59% · other way -2.33% (n=12) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▲ +0.3% hist -0.11–+0.27% · other way +3.15% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 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 |
|---|---|---|---|---|---|---|
| JPM JPM | LONG | +2.0% · 5d -0.3% ↺ fades | 76% | 40 | 0.42 | ✓ matches cascade |
| QCOM QCOM | SHORT | -3.2% · 5d -2.9% | 76% | 40 | 0.37 | ⚠ differs |
| ASML ASML | SHORT | -2.7% · 5d -2.9% | 71% | 40 | 0.31 | ⚠ differs |
| XLK XLK | SHORT | -0.6% · 5d -0.7% | 66% | 40 | 0.25 | ⚠ differs |
| AMD AMD | SHORT | -1.7% · 5d -2.5% | 63% | 40 | 0.22 | ⚠ differs |
| SPX SPX | LONG | +0.2% · 5d +0.4% | 61% | 40 | 0.19 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.1% · 5d -0.1% | 63% | 40 | 0.19 | ⚠ differs |
| 10y yield DGS10 | LONG | +7bp · 5d +2bp | 61% | 40 | 0.17 | · |
| NDX NDX | SHORT | -0.6% · 5d -0.9% | 61% | 40 | 0.16 | ⚠ differs |
| NVDA NVDA | SHORT | -0.6% · 5d -2.5% | 61% | 40 | 0.16 | ⚠ differs |
| XLF XLF | LONG | +0.8% · 5d -0.3% ↺ fades | 59% | 40 | 0.15 | ✓ matches cascade |
| MU MU | LONG | +1.4% · 5d -2.3% ↺ fades | 59% | 40 | 0.14 | ✓ matches cascade |
| Volatility VIX | LONG | +2.8% · 5d -3.0% ↺ fades | 56% | 40 | 0.09 | ⚠ differs |
| ETH ETH | SHORT | -0.2% · 5d -3.3% | 54% | 40 | 0.06 | ⚠ differs |