Stock Traders Remain Calm as Fed's Kevin Warsh Speech Boosts Rate Hike Odds
Federal Reserve chair Kevin Warsh’s speech at the Jackson Hole symposium increased the odds of a September interest-rate hike to nearly 60%, up from around 35% on Thursday. Despite this, stock traders appear unfazed as evidenced by the Cboe Volatility Index (VIX) hitting its lowest level for the year so far—14.1. The S&P 500 dipped slightly during midday trading but remained relatively stable compared to declines in gold and bitcoin. Analysts suggest that investors are viewing a Fed focused on inflation control without aggressive rate hikes as positive for economic stability, which supports stock markets. Longer-term volatility expectations have risen due to uncertainty around the path of interest rates, with six-month S&P 500 options priced significantly higher than one-month contracts.
Tickers: $NVDA
Topics: Federal Reserve interest rate hikes options trading stock volatility VIX