What if surging wages reignite a wage-price spiral?
A hot AHE print revives wage-price-spiral fears; real yields and the Fed path climb, squeezing long-duration tech hardest while labor-constrained homebuilders lag. Rhymes with 2021-22 when sticky wage growth forced the hawkish repricing that crushed the Nasdaq ~33%. Forward angle: unit labor costs now sit against softening productivity, but post-2023 immigration-driven labor supply caps spiral risk versus the 1970s template — fade the most extreme spiral pricing.
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 hot average-hourly-earnings print reignites a wage-price-spiral narrative. The trigger decomposes into signed root‑shocks — Inflation surprise ▲ · Labor shortage ▲ — 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 | ▼ -0.6% hist -0.99–+0.06% · other way -1.45% (n=10) |
| 2 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.6% hist -1.01–+0.09% · other way +2.43% (n=9) |
| 3 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.62–-0.08% · other way -1.17% (n=10) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +6bp hist +0.95–+6.04% · other way +5.5% (n=10) |
| 5 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +5bp hist +0.03–+7.17% · other way +4.5% (n=10) |
| 6 | Homebuilders XHB 📈 chart | Equity | ▼ -0.4% hist -0.96–+2.23% · other way +2.31% (n=8) |
| 7 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -2.56–+4.3% · other way -3.44% (n=10) |
| 8 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -0.94–+0.24% · other way +1.79% (n=10) |
| 9 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -0.57–+0.82% · other way -5.52% (n=7) |
| 10 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -6.0–+2.5% · other way -1.22% (n=2) |
| 11 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.3% hist -0.04–+0.48% · other way +0.79% (n=10) |
| 12 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.3% model prior · unmeasured |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.35–+0.45% · other way -1.88% (n=9) |
| 14 | Arm ARMon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.9–+0.25% · other way -10.06% (n=2) |
Probable recommendation
Why we may diverge from history
Trust the cascade short on MSTR: +27% realized is pure 2024 BTC-bull contamination (+122%/+114% single days) — MSTR is a levered BTC proxy, the wage-spiral rate channel is swamped by bitcoin, not history.
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 |
|---|---|---|---|---|---|---|
| ARM ARM | SHORT | -0.7% · 5d -3.3% | 80% | 10 | 0.54 | ✓ matches cascade |
| XHB XHB | LONG | +2.2% · 5d -0.5% ↺ fades | 60% | 35 | 0.18 | ⚠ differs |
| USDJPY USDJPY | LONG | +0.1% · 5d +0.1% | 59% | 37 | 0.18 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.4% · 5d +0.1% ↺ fades | 60% | 35 | 0.17 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +4bp · 5d +3bp | 57% | 40 | 0.12 | ✓ matches cascade |
| US dollar DXY | LONG | +0.3% · 5d -0.1% ↺ fades | 55% | 40 | 0.09 | ✓ matches cascade |
| XLK XLK | SHORT | -0.3% · 5d -0.7% | 56% | 36 | 0.08 | ✓ matches cascade |
| Volatility VIX | SHORT | -0.7% · 5d +1.2% ↺ fades | 55% | 40 | 0.08 | · |
| Bitcoin BTC | LONG | +1.0% · 5d -4.8% ↺ fades | 53% | 30 | 0.05 | ⚠ differs |
| SOL SOL | SHORT | -5.6% · 5d -8.6% | 54% | 26 | 0.05 | ✓ matches cascade |
| SMH SMH | LONG | +0.6% · 5d -0.7% ↺ fades | 53% | 36 | 0.05 | ⚠ differs |
| HOOD HOOD | SHORT | -1.4% · 5d -2.3% | 52% | 25 | 0.04 | ✓ matches cascade |
| NDX NDX | SHORT | -0.6% · 5d -1.0% | 53% | 40 | 0.03 | ✓ matches cascade |
| EURUSD EURUSD | SHORT | -0.3% · 5d +0.1% ↺ fades | 51% | 35 | 0.02 | ✓ matches cascade |
Why this probability
Wage-price-spiral narrative fading; tight labor easing makes reignition unlikely even over years. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.