What if Stagnation camp wins: deflation scare drives a duration melt-up?
Evidence tips decisively toward the secular-stagnation view as aging deepens deflationary pressure, triggering a sharp bull-flattening melt-up in long bonds and a re-rating of duration assets.
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 3–10 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. Evidence tips decisively toward the secular-stagnation view as aging deepens deflationary pressure, triggering a sharp bull-flattening melt-up in long bonds and a re-rating of duration assets. The trigger decomposes into signed root‑shocks — Yield-curve slope ▼ · Inflation expectations ▼ · 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 | ▲ +0.7% hist +0.09–+0.74% · other way +1.17% (n=8) |
| 2 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -6bp hist -4.63–+2.23% · other way +13.0% (n=12) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.5% hist +0.1–+0.48% · other way +0.65% (n=8) |
| 4 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.6% hist -6.35–+13.34% · other way -2.05% (n=8) |
| 5 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.5% hist +0.1–+0.31% · other way -1.88% (n=8) |
| 6 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -5bp hist -3.7–+4.52% · other way +9.5% (n=12) |
| 7 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.4% hist -2.93–+6.35% · other way -1.26% (n=7) |
| 8 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.3% model prior · unmeasured |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -0.86–+2.38% · other way -0.96% (n=8) |
| 10 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -2.43–+6.07% · other way +1.12% (n=8) |
| 11 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.2% hist -0.13–+1.02% · other way -2.1% (n=12) |
| 12 | Arm ARMon Hyperliquid 📈 chart | Equity | ▲ +0.2% hist -0.26–+0.67% · other way -10.73% (n=4) |
| 13 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.2% hist -5.24–+10.66% · other way +9.57% (n=7) |
| 14 | Homebuilders XHB 📈 chart | Equity | ▲ +0.2% hist -0.37–+0.31% · other way +1.26% (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 |
|---|---|---|---|---|---|---|
| SPX SPX | LONG | +0.8% · 5d +0.7% | 70% | 40 | 0.34 | ✓ matches cascade |
| Volatility VIX | SHORT | -2.4% · 5d -6.4% | 65% | 40 | 0.23 | · |
| HOOD HOOD | LONG | +10.2% · 5d +0.1% | 61% | 23 | 0.20 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +6bp · 5d +3bp | 62% | 40 | 0.19 | ⚠ differs |
| SMH SMH | LONG | +1.2% · 5d -0.4% ↺ fades | 60% | 40 | 0.17 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.3% · 5d -0.1% | 62% | 40 | 0.17 | · |
| US dollar DXY | SHORT | -0.2% · 5d -0.1% | 60% | 40 | 0.15 | · |
| NDX NDX | LONG | +0.2% · 5d -0.8% ↺ fades | 57% | 40 | 0.11 | ✓ matches cascade |
| Gold XAU | SHORT | -0.1% · 5d -0.9% | 55% | 40 | 0.09 | ⚠ differs |
| Bitcoin BTC | LONG | +5.7% · 5d -2.3% ↺ fades | 55% | 40 | 0.09 | ✓ matches cascade |
| 30y yield DGS30 | LONG | +5bp · 5d +2bp | 55% | 40 | 0.08 | ⚠ differs |
| ETH ETH | LONG | +2.1% · 5d -4.2% ↺ fades | 55% | 33 | 0.07 | ✓ matches cascade |
| XHB XHB | SHORT | -0.5% · 5d -1.2% | 53% | 40 | 0.04 | ⚠ differs |
| XLK XLK | LONG | +0.3% · 5d -0.5% ↺ fades | 47% | 40 | 0.00 | ✓ matches cascade |