November 15, 2017, 4:00pm EST
Stocks were broadly lower today. Bond yields were lower. Commodities were mostly lower. And the VIX, the index that measures investor demand for protection from a decline in stocks (also known as the “fear index”), was the biggest mover of the day. But it’s rising from a low base.
So you can see the rising VIX as we’ve seen the growing signs that there may be some forced selling across markets related to those arrests, and the Kingdom’s pursuit of hundreds of billions of related assets.
Still, for perspective, you can see how low the VIX remains, relative to history.
Still, a market event doesn’t mean an economic event is occurring. The economy is good. And with stimulative fiscal policy coming down the pike, it should be better over the next 12 months (and coming years). So there is a difference between volatility and recession risk.
On that note, in the next chart from the NY Fed, the Treasury market is telling us recession risk is very low–9% chance in the next 12 months).