What if MOVE index spikes as Treasury vol bleeds into credit spreads?
A surge in the MOVE index of rate volatility spills into corporate credit, widening IG and HY spreads as dealers cut risk and convexity hedging amplifies Treasury swings.
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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.
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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-off shock. A surge in the MOVE index of rate volatility spills into corporate credit, widening IG and HY spreads as dealers cut risk and convexity hedging amplifies Treasury swings. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.