The CBOE Volatility Index (VIX) experienced a notable decline as recent data revealed a slowdown in core inflation, fueling expectations for potential Federal Reserve rate cuts. This easing of inflationary pressures has alleviated fears of aggressive monetary tightening, leading to a rally in US equities and a drop in Treasury yields. The market's positive response to the inflation data reflects a shift in sentiment, with investors anticipating a more accommodative monetary policy environment. The decline in the VIX underscores the market's reduced anxiety over potential interest rate hikes and its optimistic outlook for the coming months.
The VS TR -1x Short VIX Futures ETF (SVIX) saw a significant increase, closing at $26.10, up 8.07% from the previous close of $24.15, and currently trading at $25.90 as of 18:00 on Wednesday, January 15.