War or Recession Might Be Needed to Break Low-Vol, Goldman Says
- Markets have been stuck in ‘low volatility regime’ for a year
- Recent pickup unlikely to be sustainable without large shock
Merrill Lynch Says Markets Aren't Pricing Anything
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It’ll take more than central bank tightening to shake volatility from its yearlong slumber, according to Goldman Sachs Group Inc. A large shock such as recession or war is usually required.
That’s generally been the case for the 14 similar low volatility “regimes” since 1928, at least in equity markets, Goldman Sachs strategists Christian Mueller-Glissmann and Alessio Rizzi said. These periods on average lasted nearly two years, featured short-lived spikes and realized S&P 500 volatility was usually at or below 10.