Has The Fed Lost Control? VIX (Stock Vol) Falls Below 10, TYVIX (T-Note Vol) Falls Below 4

By Anthony B. Sanders

Are markets out of control due to The Federal Reserve keeping rates so low for so long?

The VIX just hit an all-time low.

vix1990

The VIX (Chicago Board Options Exchange SPX Volatility Index) has fallen below 10 and the S&P500 index has soared with massive Federa Reserve stimulus (aka, the punchbowl).

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The TYVIX (CBOE CBOT 10 year U.S. Treasury Note Volatility Index) has fallen below 4 despite Fed rate increases and their lame unwinding of their prodigious balance sheet.

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This bring up the question: Has The Fed lost control of markets? This is important in that it may lead the Fed Open Market Committee (FOMC) to raise rates as a faster pace, as indicated by The Fed’s “Dot Plot.”

feddotplots

Meanwhile, “inflation” remains subdued at 1.5% YoY.

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We will see if The Fed is speeding up their balance sheet unwind after today at 3pm EST.

Will there be a trigger event that will bring markets crashing back to earth?

Janet Yellen better start drinking a few Tequila Sunrises if that happens.

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