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Low Spreads + Low Inflation = Low Volatility

By: Russ Koesterich
Harvest Exchange
January 12, 2018

Low Spreads + Low Inflation = Low Volatility

During the first four days of 2018, U.S. stocks rose 2.50% and the VIX Index, a measure of implied volatility, never closed above 10, very low by historical standards. For years, investors interpreted extreme low volatility readings as a warning sign; lately it has become the norm (see the accompanying chart). Whether this can continue depends less on external culprits such as the din out of Washington and more on the real economy and financial market conditions.



Originally Published at: Low Spreads + Low Inflation = Low Volatility