What if a recession sparks a nationwide rent-control wave?
A recession-driven statewide rent-cap wave compresses multifamily NOI and re-rates apartment REITs (AvalonBay, Equity Residential, Mid-America) lower; trade short the apartment-REIT subsector, watch HY. Rhymes with California AB-1482 and Oregon's 2019 statewide cap, plus the COVID eviction-moratorium NOI hit. Transmission is US-domestic real-estate-equity and CMBS multifamily. Forward angle: politically this gains traction precisely when rates are high and supply tight, so the NOI hit compounds an already-levered refinancing wall. Roots sensible.
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-off shock. A US recession spurs statewide rent caps across multiple states, slashing multifamily NOI and apartment REIT valuations. The trigger decomposes into signed root‑shocks — 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 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.3% hist -8.31–+1.73% · other way -1.0% (n=12) |
| 2 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -1.41–-0.26% · other way +24.57% (n=12) |
| 3 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.1% model prior · unmeasured |
| 4 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -8.0–+2.32% · other way +4.71% (n=12) |
| 5 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.9% hist -0.69–-0.1% · other way -0.29% (n=12) |
| 6 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -4.59–+1.27% · other way +5.56% (n=12) |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.8% hist -0.76–+0.99% · other way +3.18% (n=12) |
| 8 | Financials XLF 📈 chart | Equity | ▼ -0.7% hist -0.45–+-0.0% · other way +0.21% (n=12) |
| 9 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -0.9–+0.03% · other way +0.18% (n=12) |
| 10 | Tech sector XLK 📈 chart | Equity | ▼ -0.7% hist -0.6–+0.33% · other way -0.38% (n=12) |
| 11 | High-yield credit HYG 📈 chart | Rate | ▼ -0.6% hist -0.44–-0.2% · other way -0.35% (n=12) |
| 12 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.38–-0.06% · other way +18.8% (n=12) |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.62–+0.82% · other way +2.4% (n=12) |
| 14 | JPMorgan JPM 📈 chart | Equity | ▼ -0.4% hist -0.48–+1.02% · other way +2.47% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade's SHORT: COIN and the semis (SMH/AMD/AVGO/TSM) are swamped by crypto and AI-capex drivers — their 2025 tariff/geopolitical analogues caught sector rallies unrelated to US multifamily rent-cap NOI compression.
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 |
|---|---|---|---|---|---|---|
| CL CL | SHORT | -3.2% · 5d -1.7% | 75% | 40 | 0.39 | ✓ matches cascade |
| MU MU | SHORT | -3.5% · 5d -2.8% | 75% | 40 | 0.37 | ✓ matches cascade |
| SOL SOL | SHORT | -6.8% · 5d -5.4% | 66% | 38 | 0.24 | ✓ matches cascade |
| JPM JPM | LONG | +1.1% · 5d +0.0% | 62% | 40 | 0.20 | ⚠ differs |
| ETH ETH | SHORT | -6.9% · 5d -4.9% | 61% | 38 | 0.16 | ✓ matches cascade |
| AMD AMD | SHORT | -0.1% · 5d -1.4% | 60% | 40 | 0.16 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -3.9% · 5d -2.8% | 59% | 39 | 0.14 | ✓ matches cascade |
| XLF XLF | LONG | +0.2% · 5d -0.1% ↺ fades | 57% | 40 | 0.13 | ⚠ differs |
| SMH SMH | LONG | +1.0% · 5d -0.3% ↺ fades | 55% | 40 | 0.09 | ⚠ differs |
| Gold XAU | LONG | +0.1% · 5d -0.3% ↺ fades | 55% | 40 | 0.08 | ✓ matches cascade |
| XLK XLK | LONG | +0.6% · 5d -0.5% ↺ fades | 53% | 40 | 0.04 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.1% · 5d +0.2% ↺ fades | 53% | 40 | 0.04 | ✓ matches cascade |
| MRVL MRVL | LONG | +1.5% · 5d -2.1% ↺ fades | 53% | 40 | 0.04 | ⚠ differs |
| XLU XLU | SHORT | -0.4% · 5d -0.3% | 53% | 40 | 0.04 | ⚠ differs |
Why this probability
Rent caps spread slowly; multistate wave needs deep recession, federal/state politics fragmented. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.