What if a US debt-ceiling impasse forces a technical default?
A debt-ceiling technical default is a reserve-confidence shock, not a credit one: the long end and the dollar sell while gold and bitcoin bid as non-sovereign hedges, and bills around the x-date cheapen most. Closest analogues are the 2011 S&P downgrade (gold ripped, stocks fell, but ironically Treasuries rallied on safe-haven flows) and the 2023 standoff. Forward angle: unlike 2011, foreign official demand is thinner and de-dollarization is a live theme, so the curve and DXY reaction could be larger than the historical playbook.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A US debt-ceiling impasse drives a technical-default scare and rating action. The trigger decomposes into signed root‑shocks — Dollar/reserve confidence ▼ · Risk appetite ▼ · Volatility (VIX) ▲ — which propagate through our causal graph to the markets below.