U.S. Treasury Secretary Steven Mnuchin is concerned about market volatility.
So concerned, in fact, that he said in a roundtable interview at Bloomberg’s Washington office on Tuesday that he plans to ask the Financial Stability Oversight Council, which he oversees, to look into what’s causing the turbulence. His working hypothesis is that high-speed traders and the Volcker Rule are to blame.
If Mnuchin was concerned on Tuesday, he must be spooked by now. The S&P 500 Index fell 1.5 percent on Wednesday and an additional 1.6 percent on Thursday. And the market expects more pain. The CBOE Volatility Index, or VIX, which measures expected volatility over the next 30 days, closed at 28.38 on Thursday, up 73 percent since Dec. 3 and 11 percent since Tuesday.
But here’s the reality: There’s nothing amiss about the recent volatility, and if anything, volatility has been lower than usual in recent years, not higher.Continue reading “Mnuchin Forgot to Check His Figures on Stock Volatility”