Bank of America derivatives strategists have highlighted a potential underestimation of today's US Consumer Price Index (CPI) data impact, as the options market is pricing in minimal implied reaction. This suggests a complacency among traders, who are more focused on growth prospects than inflation risks. A cooler-than-expected CPI reading could support a late December rally, while a hotter print might reignite market volatility. The current economic environment, with a resilient economy and falling inflation, has been favorable for equities, but new tariffs and expansionist fiscal policies could increase inflationary pressures, potentially disrupting the easing cycle and leading to higher interest rates.
The ProShares Short VIX Short Term Futures ETF (SVXY) saw a slight increase, rising 0.41% to $53.48 as of 07:00 AM on Wednesday, December 11.