The Fed Hiked. Oil Hit $100+. Yields Surged. Now What?
Test how acute macro shocks—policy rate hikes, 10Y yield surges, crude oil spikes, and dollar squeeze—reprice your multi-asset portfolio and discover tactical hedging rotations.
Simulated Portfolio Stress Consequence
Asset-by-Asset Shock Attribution (% Return)
Cross-Elasticity ModelTactical Playbook: What To Do Right Now
When central banks hike into an energy surge, liquidity contracts while discount rates repricing long-duration equities triggers an acute multiple compression.
- Duration Defense: Trim 10Y+ sovereign debt; transition into ultra-short 3M T-Bills yielding risk-free carry.
- Energy / Cash Flow Overweight: Oil at $100+ converts upstream producers into dividend cash cows with negative correlation to rates.
- Crypto & Unprofitable Growth: High cost of capital disproportionately punishes non-yielding speculative assets. Require deeper margin of safety.
| Asset Class | Weight | Fed Hike Beta | Oil Beta | 10Y Yield Beta | Dollar (DXY) Beta | Total Return |
|---|
The Macro Transmission Mechanism
When the Federal Reserve hikes while crude oil crosses $100, the economy faces a double squeeze: cost-push inflation from energy combined with demand destruction from elevated borrowing costs.
Surging 10-year Treasury yields automatically depress the present value of future corporate cash flows. High-multiple growth tech and speculative digital assets bear the brunt, while cash-flowing commodity producers and short-term floating paper thrive.
Frequently Answered Questions
Why does Bitcoin drop when yields surge?
Bitcoin trades as high-beta global fiat liquidity. When the Fed hikes and Treasury yields hit fresh highs, the cost of capital surges and liquidity dries up from risk curves, causing violent crypto de-risking.
How are bond returns calculated in this model?
Sovereign and investment-grade bonds use Modified Duration: Percentage Price Δ ≈ -(Modified Duration × Yield Δ) + 0.5 × (Convexity × (Yield Δ)²).
Can I test custom portfolio weights?
Yes. Enter your custom percentages directly in the weight fields. The simulator automatically renormalizes them so your total equals 100%.