Bond Tailwind Unwind: Equity Multiple & Yield Regime Simulator

Operationalizing the Reuters Breakingviews thesis: Quantifying multiple compression & equity duration across interest rate regimes.
Macro Regimes & Presets
Yield & Valuation Parameters
10Y Sovereign Yield ($R_f$) 4.35%
Equity Risk Premium (ERP) 4.20%
Expected Long-Term EPS Growth ($g$) 6.50%
Decomposition Baseline Reference
Historical Tailwind Baseline P/E 22.40x
Equity Discount Rate ($k_e = R_f + ERP$)
8.55%
Implied Fair Market P/E
21.8x
Annual Multiple Drag (Lost Tailwind)
-1.24% / yr
Required Earnings Growth Offset
+1.24%
Sector Equity Duration Sensitivity & Multiple Drawdown vs Baseline
High-duration cash flows suffer acute multiple compression under higher baseline discount rates compared to short-duration defensive value.
Sector Sensitivity & Multiple Matrix
Sector / Asset Profile Equity Duration Baseline Multiple Simulated Multiple Drawdown Impact
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