Investor Anxiety Grows As VIX Index Records Dramatic Increase Amid Fed Rate Hike Concerns: Why Is Volatility Spiking Thursday?
Portfolio Pulse from Piero Cingari
The CBOE Volatility (VIX) Index surged over 20% on Thursday due to concerns that the Federal Reserve may raise interest rates again in 2023. This was fueled by strong economic data and hawkish remarks from Federal Reserve Bank of Dallas President, Lorie K. Logan. Traders now anticipate an increased likelihood of Fed rate hikes, with the probability of a 25 basis points hike in July rising to 95%. ETFs that track the VIX index, such as ProShares VIX Short-Term Futures ETF (VIXY), iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX), VelocityShares Daily 2x VIX Short-Term ETN (TVIX), ProShares Ultra VIX Short-Term Futures ETF (UVXY), and ProShares VIX Mid-Term Futures ETF (VIXM), may be impacted.
July 06, 2023 | 4:31 pm
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POSITIVE IMPACT
The VelocityShares Daily 2x VIX Short-Term ETN (TVIX) may see increased volatility due to the surge in the VIX index.
As TVIX tracks the performance of the VIX index, a surge in the VIX index will likely lead to increased volatility in TVIX.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
The ProShares Ultra VIX Short-Term Futures ETF (UVXY) may experience increased volatility due to the surge in the VIX index.
As UVXY tracks the performance of the VIX index, a surge in the VIX index will likely lead to increased volatility in UVXY.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
The ProShares VIX Mid-Term Futures ETF (VIXM) may see increased volatility due to the surge in the VIX index.
As VIXM tracks the performance of the VIX index, a surge in the VIX index will likely lead to increased volatility in VIXM.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
The ProShares VIX Short-Term Futures ETF (VIXY) may see increased volatility due to the surge in the VIX index.
As VIXY tracks the performance of the VIX index, a surge in the VIX index will likely lead to increased volatility in VIXY.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) may experience increased volatility due to the surge in the VIX index.
As VXX tracks the performance of the VIX index, a surge in the VIX index will likely lead to increased volatility in VXX.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100