What if a major central bank abandons forward guidance?
Scrapping forward guidance raises rate volatility and steepens the implied-vol term structure; high-beta tech sells first and risk-parity trims as cross-asset vol rises. The analogue is the BOJ's abrupt 2022-23 communication shifts and the broader post-2021 'data-dependent' regime that lifted MOVE. The cleanest expression is long rate vol (MOVE/swaptions), not the modest equity drawdown; this is a vol-of-vol trade more than a directional one.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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. A leading central bank scraps forward guidance entirely after repeated misses, raising rate volatility and widening implied-vol term structure. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Fed policy path ▲ — which propagate through our causal graph to the markets below.