What if a bond-market revolt forces sudden US austerity?
A US bond-market revolt is the textbook bear-steepener: term premium snaps wider, the 30y leads the 10y higher, DXY softens and gold/BTC bid as the fiscal hedge while long-duration tech underperforms. The literal rhyme is the Sep-2022 Liz Truss gilt crisis - a forced fiscal U-turn after yields gapped - and the 1994 Treasury bear market. Forward angle: unlike the UK, no LDI-pension margin-call doom-loop forces the Fed's hand, but a buyer's strike on the long bond plus heavy coupon supply means the 30y is the cleanest short and the convexity hedge.
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-off shock. A US bond-market revolt forces sudden austerity (a 'Liz Truss' moment for Treasuries). The trigger decomposes into signed root‑shocks — Dollar/reserve confidence ▼ · Real yields ▲ — 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 | ▲ +3.3% hist -2.02–+8.52% · other way +27.47% (n=12) |
| 2 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.8% hist +0.01–+1.26% · other way +6.05% (n=11) |
| 3 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.8% hist +0.42–+1.26% · other way +0.37% (n=12) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +13bp hist -6.09–+7.51% · other way +8.8% (n=12) |
| 5 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +12bp hist -7.96–+6.9% · other way +9.1% (n=12) |
| 6 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +1.3% hist -2.36–+1.65% · other way +21.75% (n=11) |
| 7 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -1.2% hist -0.69–-0.32% · other way +0.89% (n=12) |
| 8 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +1.1% hist -9.42–+0.82% · other way -1.04% (n=11) |
| 9 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +1.1% hist -0.21–+0.95% · other way -0.88% (n=12) |
| 10 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.53–-0.2% · other way +0.09% (n=12) |
| 11 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.5–-0.03% · other way +0.06% (n=12) |
| 12 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▲ +0.8% hist +0.27–+0.54% · other way -0.73% (n=12) |
| 13 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.7% hist -6.17–+2.28% · other way +4.87% (n=11) |
| 14 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.7% model prior · unmeasured |
Probable recommendation
Why we may diverge from history
Trust the cascade: a US-specific Treasury revolt strips DGS10/DGS30 of their 2011/2013 safe-haven bid, so the realized yields-down analogues are structurally inverted — this shock IS the bond, not a flight to it.
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 |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -7.6% · 5d -10.6% | 83% | 20 | 0.40 | ⚠ differs |
| MU MU | SHORT | -5.0% · 5d -3.4% | 73% | 37 | 0.38 | ✓ matches cascade |
| ASML ASML | SHORT | -4.6% · 5d -3.9% | 69% | 33 | 0.31 | ✓ matches cascade |
| INR INR | SHORT | -1.0% · 5d -0.1% | 65% | 30 | 0.28 | ⚠ differs |
| CL CL | SHORT | -1.6% · 5d +0.3% ↺ fades | 69% | 31 | 0.28 | ⚠ differs |
| 10y yield DGS10 | SHORT | -12bp · 5d -4bp | 64% | 39 | 0.25 | ⚠ differs |
| ARM ARM | SHORT | -5.4% · 5d -5.9% | 69% | 16 | 0.25 | ✓ matches cascade |
| NVDA NVDA | SHORT | -3.5% · 5d -4.4% | 69% | 31 | 0.25 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -11bp · 5d -2bp | 64% | 38 | 0.24 | ⚠ differs |
| XHB XHB | SHORT | -0.8% · 5d -0.8% | 65% | 30 | 0.23 | ✓ matches cascade |
| ETH ETH | SHORT | -5.9% · 5d -9.4% | 63% | 22 | 0.18 | ⚠ differs |
| SMH SMH | SHORT | -0.7% · 5d -1.1% | 60% | 31 | 0.16 | ✓ matches cascade |
| MRVL MRVL | LONG | +1.2% · 5d -1.9% ↺ fades | 60% | 31 | 0.15 | ⚠ differs |
| COIN COIN | SHORT | -2.9% · 5d -5.0% | 57% | 20 | 0.12 | ⚠ differs |
Why this probability
Bond-market revolts happen (Truss 2022); US deficits/term premium rising raise gilt-style episode odds. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.