Fed Rate Hike Probability & Portfolio Impact Workbench

Policy Decision Preset

Interest Rate Controls

Hike Magnitude +25 bps

Futures Hike Probability 78.5%

Neutral Real Rate (r*) 2.5%

Macro Indicators

Headline Inflation (CPI YoY) 3.2%

Unemployment Rate (U3) 4.1%

Portfolio Allocation (%) 100% Total

Equities (S&P 500) 50%

10Y US Treasuries 30%

Gold (XAU) 10%

Bitcoin (Crypto) 10%

Projected Fed Funds Target

5.25% - 5.50%

Oct Goldman Expectation (+25 bps)

Implied Hike Probability

78.5%

30D Fed Funds Futures Pricing

Expected Portfolio Return

-1.42%

Weighted rate shock response

Portfolio Volatility & Max DD

14.8% (-8.5% DD)

Taylor Rec: 5.15%

Fed Funds Futures Yield Trajectory

October Target Shift

Blue line: Baseline forward trajectory • Dashed line: Post-shock yield curve • Amber dot: October pricing.

Taylor Rule Policy Prescriptions

Target: 2.0% Inflation / 4.0% NAIRU

Formula: r* + π + 0.5(π - 2.0%) - 2.0(u - 4.0%) - 0.95% (Fed inertia)

Taylor Rule Recommended Rate 5.15%

Policy Gap (Actual vs. Rule) +0.225% (Restrictive)

Inflation Gap (π - 2.0%) +1.20%

Unemployment Gap (u - 4.0%) +0.10%

Taylor guidance indicates whether current policy rates are neutral, accommodating, or excessively restrictive relative to dual-mandate goals.

Asset Class Sensitivity & Portfolio Stress Matrix

Scenario: +25 bps October Shock

Asset Class	Allocation	Rate Sensitivity (Δ/25bps)	Annualized Vol	Projected Impact	Contrib. to Return
Equities (S&P 500)	50%	-1.50%	17.0%	-1.50%	-0.75%
10Y US Treasuries	30%	-0.70%	7.5%	-0.70%	-0.21%
Gold (XAU)	10%	-1.10%	14.0%	-1.10%	-0.11%
Bitcoin (BTC)	10%	-3.50%	54.0%	-3.50%	-0.35%
Total Portfolio Stress Impact				14.8% Vol	-1.42%