What if sticky inflation forces surprise back-to-back RBA hikes?
Back-to-back emergency RBA hikes after a dovish hold whipsaw AUD and front-end rates: the read is higher reals and a risk-off duration hit, with AUD spiking and rate-sensitive tech sold. Rhymes with the 2010-11 RBA tightening cycle and the broader 2022 hawkish-surprise complex that punished long-duration equities. Australia exports iron ore/LNG to China; sticky domestic inflation forces the RBA's hand independent of the terms-of-trade. Forward: a housing-leveraged economy makes each surprise hike more destabilizing than the Fed's.
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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.
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. After a dovish hold, sticky Australian inflation forces back-to-back emergency RBA hikes, whipsawing AUD and rates traders. The trigger decomposes into signed root‑shocks — Fed policy path ▲ · Inflation surprise ▲ — which propagate through our causal graph to the markets below.