Sunday, October 13, 2024

What is volatility telling us at this time?


Equity volatility, as measured by the VIX index, is reaching highs or is at least beyond the normal range. The VIX not at the level of the yen carry trade unwind, but it is still high and says something about the uncertainty and risk with the US presidential election. If there is max uncertainty with an election, then volatility should be at high levels. However, the MOVE index of bond volatility is telling us a different story. It is below average and suggesting that nothing will change with inflation, growth, or debt regardless of the election. This is an interesting comparison. 
 

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