A Wall Street street sign in front of the New York Stock Exchange in New York, US, on Wednesday, July 31, 2024. Federal Reserve officials held interest rates at the highest level in more than two decades but signaled they are moving closer to lowering borrowing costs amid easing inflation and a cooling labor market.
“Given the large SPX futures move premarket, a corresponding large move in the VIX index really isn’t that surprising,” she said in an interview. That spread didn’t last long, and by the end of the session it had shrunk to 8 points. To some market watchers, the swift comeback is an indication that the initial VIX jump likely overstated the fear among investors.
During Covid, it “was both a liquidity event and a macro shock,” she wrote in a note to clients. “What happened on Monday was purely a liquidity event,” she added. “There was no fundamental/macro reason underlying the move and therefore no reason to expect volatility to remain persistently high once the deleveraging was over.”
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