Macroeconomic uncertainty still high post pandemic

 

Using the latest index of macroeconomic uncertainty that is based on over 132 macro time series, we can see that unlike other post-recession periods, uncertainty has remained elevated. The only comparable period is the early 1980's when there were twin recessions. All other periods show a decline to long-term averages. This elevated uncertainty is applicable for 1-mont, 3-mont, and 12-month horizons although the data end at the end of 2022. 

The high uncertainty has clearly impacted investment allocation decisions; however, it is still surprising that risky asset returns have moved higher. Perhaps an updated series will show a decline consistent with the fall in VIX and MOVE index and thus create normalization and a demand for riskier assets.