Business & Finance
VIX hits year-to-date low after Fed Chair Warsh's Jackson Hole speech
Market measures reflect calm short-term equity volatility despite increased expectations of a September interest-rate hike.
The short version
- Expectations for a Federal Reserve interest-rate hike in September rose to nearly 60% following Fed Chair Kevin Warsh's Jackson Hole speech.
- Despite higher rate expectations, the Cboe Volatility Index (VIX) fell to a year-to-date low of 14.1.
- Alternative assets including bitcoin and gold declined by at least 2.5%, while long-term options indicate potential rate-driven market volatility months ahead.
Key facts
- Futures tracking by CME Group indicated the probability of a September Fed rate hike rose to nearly 60%, up from 35% the previous day.[CNBC]
- The Cboe Volatility Index (VIX) dropped to a year-to-date low of 14.1 following Federal Reserve Chair Kevin Warsh's speech at Jackson Hole.[CNBC]
- Bitcoin and gold prices both dropped by at least 2.5% following the address.[CNBC]
- The spread between six-month and one-month S&P 500 option prices reached the 96th percentile of the past year's range.[CNBC]
What remains uncertain
- Market analysts disagree on the long-term impact of interest rate uncertainty, with options pricing pointing toward potential market volatility in future months while short-term volatility measures remain subdued.[CNBC]