Volatility Bogeyman Seen Lying in Wait With Event Risk Looming
- Tallbacken sees swings fueled by almost any Fed rate scenario
- BofAML says options are underpricing a variety of risks
Photographer: Oscar Key
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The decline in equity volatility from its early August highs looks overdone given the number of risk events that lie ahead, according to market participants.
Federal Reserve meeting minutes, Fed Chair Jerome Powell’s speech at Jackson Hole and a slew of economic data from purchasing managers indexes to jobless claims are among those seen to have the potential to re-ignite price swings. The Fed is seen as the most likely catalyst, with some commentators suggesting volatility is inevitable no matter what path on rates it chooses.