Policy Uncertainty, VIX, 5 Year Breakevens, Dollar Up

Policy uncertainty, the VIX measuring volatility, 5-year breakevens signaling inflation expectations, and a strengthening dollar. These factors collectively influence economic sentiment and investment strategies.

person using MacBook Pro on table

Image Source: Unsplash

Since the election:

Figure 1: EPU (blue, left scale), 7 day centered moving average (bold red, left scale), VIX (green, right scale). Source: policyuncertainty.com, CBOE via FRED, author’s calculations. 

Figure 2: Five year Treasury-TIPS spread, % (black, left scale), log Fed dollar index relative, 11/5/2024 = 0 (red, right scale). Source: Treasury, Federal Reserve via FRED, author’s calculations.


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