What if markets conclude the neutral interest rate is structurally higher?
Markets conclude the neutral rate (r*) is structurally higher, repricing the entire curve upward and embedding a more hostile environment for bank duration risk.
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. Markets conclude the neutral rate (r*) is structurally higher, repricing the entire curve upward and embedding a more hostile environment for bank duration risk. The trigger decomposes into signed root‑shocks — Fed policy path ▲ · Real yields ▲ · 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 | Tech sector XLK 📈 chart | Equity | ▼ -1.3% hist -0.9–-0.3% · other way +2.13% (n=12) |
| 2 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.2% hist -0.77–-0.39% · other way +1.2% (n=12) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.3% hist -3.88–+0.66% · other way +19.61% (n=12) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -7.27–+1.6% · other way +5.04% (n=10) |
| 5 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.8% model prior · unmeasured |
| 6 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +8bp hist +1.49–+7.77% · other way +5.9% (n=12) |
| 7 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.8% hist -0.62–+1.29% · other way -1.46% (n=12) |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -8.79–+2.42% · other way +6.67% (n=10) |
| 9 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +8bp hist +0.45–+9.39% · other way +7.8% (n=12) |
| 10 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -6.34–+1.73% · other way +0.91% (n=10) |
| 11 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.38–-0.15% · other way +2.89% (n=12) |
| 12 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.69–+0.61% · other way +3.07% (n=12) |
| 13 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.65–+0.72% · other way +12.41% (n=8) |
| 14 | Arm ARMon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -5.74–+1.11% · other way -8.33% (n=8) |
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 |
|---|---|---|---|---|---|---|
| Gold XAU | LONG | +1.4% · 5d -0.6% ↺ fades | 66% | 39 | 0.28 | ⚠ differs |
| ARM ARM | SHORT | -4.8% · 5d -5.9% | 70% | 23 | 0.28 | ✓ matches cascade |
| MU MU | SHORT | -0.1% · 5d -1.0% | 65% | 40 | 0.26 | ✓ matches cascade |
| SOL SOL | SHORT | -6.0% · 5d -7.5% | 65% | 37 | 0.25 | ✓ matches cascade |
| MSTR MSTR | SHORT | -3.0% · 5d -3.6% | 61% | 39 | 0.22 | ✓ matches cascade |
| AMD AMD | SHORT | -0.8% · 5d -1.3% | 63% | 40 | 0.21 | ✓ matches cascade |
| ETH ETH | SHORT | -7.6% · 5d -5.3% | 62% | 37 | 0.20 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -5.5% · 5d -3.7% | 62% | 38 | 0.19 | ✓ matches cascade |
| Volatility VIX | LONG | +2.7% · 5d +0.5% | 61% | 40 | 0.18 | ✓ matches cascade |
| US dollar DXY | SHORT | -0.2% · 5d +0.1% ↺ fades | 59% | 40 | 0.17 | ⚠ differs |
| EURUSD EURUSD | LONG | +0.2% · 5d -0.2% ↺ fades | 59% | 39 | 0.16 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.0% · 5d +0.1% ↺ fades | 60% | 38 | 0.14 | ✓ matches cascade |
| 30y yield DGS30 | LONG | +3bp · 5d +3bp | 57% | 40 | 0.11 | ✓ matches cascade |
| AUD AUD | LONG | +0.3% · 5d -0.3% ↺ fades | 57% | 39 | 0.11 | ⚠ differs |