Volatility Drops Across Markets Ahead of Powell’s Jackson Hole Speech
Calm prevails across asset classes as traders await Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Symposium from Aug. 21-23. Key developments include:
- Bitcoin's 30-day implied volatility is around 36%, near two-year lows.
- CME Gold Volatility Index has dropped to 15.22%, its lowest since January.
- MOVE index for Treasury notes reached a 3.5-year low of 76%.
- The VIX fell below 14%, down from April highs near 45%.
Volatility declines occur as central banks, including the Fed, are expected to cut rates from restrictive levels rather than amid crises. The CME FedWatch tool indicates a potential 25 basis point rate cut in September, with JPMorgan forecasting a decrease to 3.25%-3.5% by Q1 2026.
Some experts suggest Powell may signal further easing in his upcoming remarks. However, concerns about market complacency arise, given trade tariffs and persistent inflation. Analysts warn that low volatility could lead to increased market turbulence, advising caution and hedging strategies.