What if Swiss deflation drags the SNB back to negative rates?
The SNB returning below zero with FX intervention against deflation pins front-end yields and distorts global safe-asset and funding markets: it weakens CHF at the margin, eases global conditions and bids long-duration risk. Rhymes with the 2015-2022 SNB negative-rate era that made the franc a funding currency and compressed European real yields. Forward: a fresh return to NIRP signals how stuck disinflation is in core Europe — bullish duration, bearish the franc on carry.
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-on shock. Swiss deflation pushes the SNB back below zero with FX intervention, distorting global safe-asset and funding markets. The trigger decomposes into signed root‑shocks — Fed policy path ▼ · Financial conditions ▲ — 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 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.9% hist -5.88–+1.68% · other way +17.19% (n=11) |
| 2 | Tech sector XLK 📈 chart | Equity | ▲ +0.7% hist -0.04–+1.07% · other way -0.2% (n=11) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.7% hist -0.17–+0.6% · other way -0.69% (n=11) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.6% hist -2.34–+2.18% · other way -3.43% (n=10) |
| 5 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.5% model prior · unmeasured |
| 6 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.5% hist -8.17–+5.08% · other way -0.32% (n=10) |
| 7 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.5% hist +0.13–+0.39% · other way +1.31% (n=11) |
| 8 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.4% hist -0.41–+0.25% · other way +0.63% (n=12) |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.4% hist -5.22–+5.37% · other way -3.08% (n=10) |
| 10 | 2y Treasury yield DGS2 | Rate | ▼ -4bp model prior · unmeasured |
| 11 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -4bp hist -15.66–+2.71% · other way +21.9% (n=12) |
| 12 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -4bp hist -17.19–+4.92% · other way +20.6% (n=12) |
| 13 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.4% hist -0.88–+0.65% · other way -0.67% (n=11) |
| 14 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▼ -0.3% hist -0.32–+0.13% · other way +0.78% (n=11) |
Probable recommendation
Why we may diverge from history
Trust history's short on HOOD: a perfect 1.0 hit-rate on-channel sample (Kaisa -34%, lira -32%) beats the cascade — SNB negative rates amid deflation signal stress that sinks high-beta brokers, cascade over-reaches.
Historical precedent — what analogous events actually did
Across 25 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 |
|---|---|---|---|---|---|---|
| HOOD HOOD | SHORT | -18.6% · 5d -7.4% | 100% | 4 | 0.83 | ⚠ differs |
| Bitcoin BTC | SHORT | -8.6% · 5d -1.6% | 83% | 6 | 0.54 | ⚠ differs |
| KRW KRW | SHORT | -2.0% · 5d +0.1% ↺ fades | 76% | 21 | 0.50 | ⚠ differs |
| SOL SOL | SHORT | -2.9% · 5d -6.1% | 80% | 5 | 0.45 | ⚠ differs |
| XHB XHB | SHORT | -1.1% · 5d +0.3% ↺ fades | 71% | 21 | 0.35 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.7% · 5d -0.1% | 70% | 20 | 0.34 | ⚠ differs |
| MSTR MSTR | SHORT | -5.4% · 5d -3.1% | 68% | 22 | 0.28 | ⚠ differs |
| AVGO AVGO | LONG | +4.6% · 5d -0.5% ↺ fades | 64% | 14 | 0.27 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -12bp · 5d -7bp | 64% | 25 | 0.26 | ✓ matches cascade |
| XLF XLF | SHORT | -0.9% · 5d -1.5% | 59% | 22 | 0.16 | ⚠ differs |
| SMH SMH | LONG | +1.6% · 5d -1.0% ↺ fades | 59% | 22 | 0.15 | ✓ matches cascade |
| AUD AUD | SHORT | -0.7% · 5d +0.2% ↺ fades | 57% | 21 | 0.14 | ⚠ differs |
| ETH ETH | SHORT | -6.0% · 5d -1.6% | 60% | 5 | 0.11 | ⚠ differs |
| 10y yield DGS10 | SHORT | -14bp · 5d -8bp | 56% | 25 | 0.11 | ✓ matches cascade |
Why this probability
Swiss deflation could push SNB negative again over 1-3yr; plausible but not yet base-case. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.