What if the PBOC slashes reserve requirements in an emergency easing?
An emergency 100bp RRR cut is capitulation to deflation that floods liquidity and nudges the renminbi weaker; the muted cascade is right — RRR cuts are liquidity plumbing, not demand, so copper and China internet get only a reflexive bid that fades absent fiscal follow-through. Rhymes with the September 2024 stimulus pop that ripped then stalled without budget support. Forward: without a fiscal bazooka, fade the metals rally; the yuan does the adjusting.
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 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. 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 mixed shock. An emergency 100bps reserve-requirement cut signals capitulation to deflation, flooding the system with liquidity and weakening the renminbi. The trigger decomposes into signed root‑shocks — China growth ▼ · China stimulus ▲ — 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 | Freeport (copper) FCX 📈 chart | Equity | ▲ +0.2% hist -3.37–+1.35% · other way +1.0% (n=12) |
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 +0.5% | 64% | 36 | 0.22 | · |
| Bitcoin BTC | SHORT | -4.5% · 5d -4.3% | 62% | 36 | 0.17 | · |
| Volatility VIX | SHORT | -1.4% · 5d +0.6% ↺ fades | 58% | 38 | 0.15 | · |
| FCX FCX | SHORT | -3.2% · 5d -2.1% | 58% | 38 | 0.14 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.1% · 5d +0.2% ↺ fades | 58% | 36 | 0.11 | · |
| US dollar DXY | LONG | +0.0% · 5d -0.1% ↺ fades | 54% | 40 | 0.07 | · |
| 10y yield DGS10 | SHORT | -4bp · 5d -5bp | 47% | 40 | 0.00 | · |
Why this probability
RRR cuts are routine PBOC tools amid deflation; emergency 100bp single move less typical. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.