There has been limited volatility as measure by the VIX index and the ranges show it. There has not been a sustained month of high volatility above 20% since the second quarter of 2012. The monthly ranges have increased, but have generally stayed below the 20% threshold. The last big taste of high volatility was during the post-QE2 period which was one of the contributing reasons for Operation Twist. It could argued that the normalization of unconventional monetary policies allowed for lower equity volatility. The greater current policy uncertainty toward long-run monetary normalization has increased the volatility of volatility over the last four months.
The market question is whether as rates rise will there be a sustained increased in the VIX. It does not seem that credit will be constrained with incremental increases in the Fed funds, but this may be a key risk facing the market starting at the end of the second quarter.