Now Fed Officials Are Starting to Wonder If the VIX Is Too Low
- Minutes to June 13-14 meeting showed concern on low volatlity
- Yellen and others have said traditional valuation metrics high
Consensus Sees Fed Balance Sheet Move in Sept.
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Wondering why three Federal Reserve officials were moved last week to make public pronouncements about rising asset prices? Evidently, it’s because of the potential for a “buildup of risk to financial stability.”
At least, that’s one way to read minutes to the June 13-14 meeting, where a few participants expressed concern about “subdued market volatility” and higher valuations. While far from an obsession -- others said rising stocks simply reflect more risk tolerance -- concern about markets is taking a bit more shape of late among policy makers.