What if an escalating tariff war tips the US into recession and lifts bank charge-offs?
An escalating tariff war tips the US toward recession and widens credit losses, with manufacturing and import-dependent borrowers leading bank charge-offs higher.
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 6–18 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 risk-off shock. An escalating tariff war tips the US toward recession and widens credit losses, with manufacturing and import-dependent borrowers leading bank charge-offs higher. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ · Risk appetite ▼ · Trade tension ▲ — 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 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -2.6% hist -1.99–-0.83% · other way +0.35% (n=12) |
| 2 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -2.0% hist -1.13–+1.38% · other way +2.88% (n=12) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.9% hist -3.56–+0.38% · other way +26.61% (n=12) |
| 4 | Tech sector XLK 📈 chart | Equity | ▼ -1.9% hist -1.25–-0.16% · other way +0.36% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.6% hist -9.49–+6.29% · other way -1.04% (n=11) |
| 6 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -1.7% hist -2.33–+2.92% · other way +2.36% (n=12) |
| 7 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -1.6% hist -1.1–+0.29% · other way +3.54% (n=12) |
| 8 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -1.41–+0.8% · other way -0.78% (n=12) |
| 9 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -2.1–+3.54% · other way +3.44% (n=12) |
| 10 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -1.37–+1.12% · other way +5.83% (n=12) |
| 11 | Marvell MRVLon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -1.58–-0.11% · other way +2.7% (n=12) |
| 12 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.2% model prior · unmeasured |
| 13 | ASML ASMLon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -1.81–+0.07% · other way -0.58% (n=12) |
| 14 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -1.1% hist -1.22–-0.54% · other way -3.18% (n=11) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 31 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 |
|---|---|---|---|---|---|---|
| COIN COIN | LONG | +1.1% · 5d +7.0% | 80% | 5 | 0.35 | ⚠ differs |
| KRW KRW | SHORT | -1.5% · 5d -0.1% | 68% | 25 | 0.35 | ✓ matches cascade |
| MRVL MRVL | SHORT | -0.9% · 5d -3.0% | 69% | 26 | 0.33 | ✓ matches cascade |
| AVGO AVGO | LONG | +4.0% · 5d -0.1% ↺ fades | 65% | 17 | 0.28 | ⚠ differs |
| XCU XCU | SHORT | -2.0% · 5d -1.2% | 65% | 26 | 0.28 | ✓ matches cascade |
| SMH SMH | LONG | +2.0% · 5d -0.8% ↺ fades | 65% | 26 | 0.26 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.5% · 5d -0.1% | 65% | 23 | 0.25 | ✓ matches cascade |
| CL CL | SHORT | -2.8% · 5d -2.3% | 65% | 26 | 0.23 | ✓ matches cascade |
| ETH ETH | SHORT | -7.3% · 5d -5.6% | 67% | 6 | 0.21 | ✓ matches cascade |
| AUD AUD | SHORT | -0.8% · 5d -0.0% | 60% | 25 | 0.19 | ✓ matches cascade |
| XLF XLF | SHORT | -0.3% · 5d -1.0% | 58% | 26 | 0.14 | ✓ matches cascade |
| FCX FCX | SHORT | -0.9% · 5d -0.6% | 58% | 26 | 0.14 | ✓ matches cascade |
| MSTR MSTR | SHORT | -2.4% · 5d -2.9% | 58% | 26 | 0.12 | ✓ matches cascade |
| SOL SOL | SHORT | -8.6% · 5d -13.5% | 60% | 5 | 0.12 | ✓ matches cascade |