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VIX, S&P 500 And The Fed Bubble Preservation Band

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

The US Federal Reserve last raised their target rate in December 2018. At the time, S&P 500  volatility spiked and the S&P 500 index tanked (the line in green is the S&P 500 index INVERTED).

Liquidity moves markets!

Follow the money. Find the profits! 

vixspxfed

But since the December rate hike, The Fed has held rates steady, the S&P 500 has risen and the VIX has settled down.

Despite jawboning by regional Fed chairs, the market is still betting on a rate cut at the next FOMC meeting.

jawboning

The Fed is now acting as a “Bubble Preservation Band.”

Hold that bubble!

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