Quantitative Frightening? VIX 1Y Implied Volatility Declines To Lowest Level Since 2014 As Fed Lets Balance Sheet Unwind

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

There is a lot of fear and uncertainty in financial markets: the US Federal government shutdown, May’s Brexit defeat, trade anxiety with China, postponement of Nancy Pelosi’s entourage 7-day excursion to Brussels, Egypt, and Afghanistan, the Mexican border wall, etc.

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But given all the fear and uncertainty in financial markets, the VIX 1-year implied volatility has actually been declining … and its decline coincides with The Fed’s Quantitative Frightening (QF) or the shrinking of The Fed’s balance sheet.

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Quantitative frighening or numbness?

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