The Federal Reserve's interest rate policies have been a major influence on market dynamics, with the S&P 500 Index ($SPX) on pins and needles ahead of today's decision. The benchmark index is up 26.5% over the past year and 18% on a year to date basis, and is lingering near record highs - but at the same time, volatility expectations are also picking up.
The Cboe Volatility Index ($VIX), which reflects investors' expectations for short-term price swings in the SPX, has cooled from its “panic highs” of early August, but still sits about 48% higher than its mid-June levels, as of this writing. This reflects heightened uncertainty on Wall Street, as investors eye softening economic data against still-elevated inflation - leaving the Fed to thread the needle on a soft landing for the U.S. economy.
