Volatility Repression: VIX Hits 4th Lowest Level Since 1990

The Chicago Board Options Exchange SPX Volatility Index (aka VIX) just hit the 4th lowest since 1990.

In fact, the low VIX regimes are 1) May 2017 to today and 2) December 1993).

Of course, the current low volatility VIX regime is courtesy of The Federal Reserve and their low interest rate policies.

November and December 2006 was a third low volatility regime, shortly before the housing bubble burst. So, low stock market volatility is not necessarily a good sign.

Here is a closer look at VIX before The Great Recession and after, with The Fed’s massive intervention. No the VIX repression in 2005 and 2006. Then KABOOM!


Finally, here is a close-up of 2000-2008 showing VIX repression in 2003-2006.


And VIX has been under 10 only during period episodes such as December 1993, May-July 2017 and Nov-Dec 2006.


Let’s see what Janet and the FOMC do over the next twelve months and how that impacts VIX.



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