Business Standard

Threat of 50 bps rate hike by Fed is new world for 21st century traders

While investors have dealt with a tightening Fed before, it's been a long time since they've had to confront one that's been anything less than transparent in its intentions

Jerome Powell

Federal Reserve Chair Jerome Powell (Photo: Reuters)

Jerome Powell has spoken, and his pronouncements on rate policy have left investors as confused about what the Federal Reserve is planning as they have been in more than two decades. The result: a severe uptick in market volatility.

With three of the biggest intraday swings in a decade just in the past week, uneasiness in stocks is approaching levels last seen in March 2020, when the coronavirus outbreak began. The Cboe Volatility Index, an options-derived measure of equity turbulence, spent most of the last five days above 30, nearly twice its level at the start of the year.


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First Published: Jan 29 2022 | 8:50 PM IST

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