What if US deficit-to-GDP falls below 5% on spending caps and growth?
Discretionary spending caps plus solid nominal growth pull the US deficit-to-GDP under 5%; reduced issuance needs compress the term premium and rally Treasuries.
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. Discretionary spending caps plus solid nominal growth pull the US deficit-to-GDP under 5%; reduced issuance needs compress the term premium and rally Treasuries. The trigger decomposes into signed root‑shocks — Credit spreads ▼ · Dollar/reserve confidence ▲ · 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 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.8% hist +0.16–+0.74% · other way +0.66% (n=11) |
| 2 | Tech sector XLK 📈 chart | Equity | ▲ +0.8% hist +0.16–+0.83% · other way +0.35% (n=10) |
| 3 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -7bp hist -5.09–+2.87% · other way +2.1% (n=12) |
| 4 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -6bp hist -3.81–+6.82% · other way -1.8% (n=12) |
| 5 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▲ +0.6% hist -0.03–+0.9% · other way -1.52% (n=12) |
| 6 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.5% hist -0.83–+0.08% · other way +0.94% (n=10) |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▼ -0.4% hist -1.73–+0.4% · other way +4.85% (n=10) |
| 8 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.4% hist -2.96–+6.37% · other way -3.61% (n=8) |
| 9 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.4% model prior · unmeasured |
| 10 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.4% hist +0.13–+0.29% · other way +0.29% (n=12) |
| 11 | High-yield credit HYG 📈 chart | Rate | ▲ +0.3% hist -0.34–+0.23% · other way +0.24% (n=10) |
| 12 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -0.94–+2.72% · other way -4.53% (n=8) |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▲ +0.3% hist -0.46–+1.95% · other way +1.0% (n=10) |
| 14 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.4% hist -0.24–+0.13% · other way -0.4% (n=10) |
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 |
|---|---|---|---|---|---|---|
| 10y yield DGS10 | LONG | +8bp · 5d +2bp | 68% | 40 | 0.27 | ⚠ differs |
| SPX SPX | LONG | +0.6% · 5d +0.6% | 65% | 40 | 0.25 | ✓ matches cascade |
| AMD AMD | SHORT | -2.4% · 5d -1.8% | 65% | 40 | 0.24 | ⚠ differs |
| TSM TSM | LONG | +2.0% · 5d -1.2% ↺ fades | 65% | 40 | 0.23 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d -0.1% | 65% | 40 | 0.22 | ⚠ differs |
| SMH SMH | LONG | +1.6% · 5d -0.2% ↺ fades | 62% | 40 | 0.21 | ✓ matches cascade |
| AVGO AVGO | LONG | +1.1% · 5d -0.3% ↺ fades | 62% | 40 | 0.21 | ✓ matches cascade |
| USDJPY USDJPY | LONG | +0.6% · 5d +0.1% | 60% | 40 | 0.17 | ✓ matches cascade |
| EURUSD EURUSD | LONG | +0.3% · 5d +0.1% | 60% | 40 | 0.16 | ⚠ differs |
| Volatility VIX | SHORT | -1.4% · 5d -6.0% | 60% | 40 | 0.15 | ✓ matches cascade |
| NDX NDX | LONG | +0.3% · 5d -0.7% ↺ fades | 60% | 40 | 0.14 | ✓ matches cascade |
| MRVL MRVL | LONG | +1.8% · 5d -1.4% ↺ fades | 60% | 40 | 0.14 | ✓ matches cascade |
| INR INR | SHORT | -0.1% · 5d +0.2% ↺ fades | 60% | 40 | 0.14 | ✓ matches cascade |
| 30y yield DGS30 | LONG | +6bp · 5d +2bp | 57% | 40 | 0.12 | ⚠ differs |