Mess with
the economy.

Change one thing, or combine a few.
Then watch the consequences negotiate.

ADD A SHOCK · 1/3 ACTIVE
SCROLL TO FOLLOW THE EFFECTS
CHANGE THE REASONSame move.
Different world.
ACTIVE REGIMESoft landing

Policy can cool demand without breaking the system.

THE SURPRISE MATTERS · SCENARIO LAB

Stack the shocks.
Find the net effect.

OPEN MODEL · ALL 20 CONCEPTSStart anywhere.

Choose a concept, then set what happened and what the market expected.

SHOCK 01 · Fed policy rate risesFed policy rate change
SURPRISE+50 bps

Hotter / tighter than expected

For market-facing, policy, and expectations channels, the model weights the surprise more heavily than the reported move. Slower economic channels follow the actual change.

TIME HORIZON1 year

Later effects appear only when their modeled lag has elapsed.

ORDER 16effects visibleORDER 24effects visibleORDER 34effects visible

Fed Funds decision

Money gets expensive.

Overnight rates move first. Growth and risk assets feel it later.

Active pathway Modeled connection
STARTING FORCES
↓
03

10Y Treasury
moves up. Usually.

Soft landing changes the balance of forces. Higher expected short rates lift the 10Y while weaker growth pushes back.

PLAUSIBLE RANGE+0.1 pts to +0.3 ptsCONFIDENCEmediumHORIZONDays to months

Twenty concepts.
One connected system.

Pick any concept to see what it is, why it matters, what moves it, and where the usual story can break.

Rates · regime-dependent

10Y Treasury Yield

The yield investors demand to lend to the US government for ten years.

%
WHAT IT IS

Think of the 10Y as future short rates, expected inflation, and term premium. Each can move differently.

WHY YOU CARE

It anchors mortgages, corporate debt, equity discount rates, and real estate.

THINK OF IT ASThe long view: policy path + inflation + term premium.
TYPICAL RANGE0.5% to 7%
USUALLY MOVES WITH

Growth · Inflation expectations · Term premium

USUALLY AFFECTS

Debt costs · Cap rates · Valuations

WATCH OUT FOR

The 10Y can fall after a hike when recession or future cuts dominate.

MODEL GOVERNANCE · OFFICIAL DATA

Calibration registry

CONNECTING…

Reading the latest versioned calibration snapshot…

SELECT A CONNECTION

Into and out of
10Y Treasury

observed · medium confidence

Fed Funds → 10Y Treasury

Higher expected short rates lift the 10Y while weaker growth pushes back.

STRENGTHregime-dependentTYPICAL LAGDays to monthsSENSITIVITY0.05–0.45percentage point per percentage point
STRESS-TEST THIS PATHModel baseline

This changes the pathway for this scenario only. It does not rewrite the governed baseline.

ASSUMES

• The source move is persistent enough to matter

• No unmodeled shock overwhelms the channel

GETS STRONGER WHEN

↑ The move is unexpected

↑ The active regime reinforces this channel

GETS WEAKER WHEN

↓ Markets already priced the move

↓ A competing force pushes the target the other way

CAN REVERSE WHEN

↺ Recession expectations dominate

↺ Inflation expectations fall

EVIDENCE FILE

observed

ObservedCalibratedEditorial

Federal Reserve research finds monetary-policy surprises transmit to medium- and long-term Treasury yields, while later evidence shows long yields can diverge when other components dominate.

HISTORICAL EXAMPLE · 2024–2026Cuts did not pull the 10Y below 4%

The Board noted that the 10-year yield stayed somewhat above 4% even after 175 basis points of policy-rate cuts, illustrating term-premium and far-forward-rate offsets.