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Weekly Comic: Will Yellen kill the recent trend of spiking volatility or is it here to stay?

EconomySep 15, 2016 09:08AM ET
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Investing.com - Global financial markets have been choppy in recent sessions as a high degree of uncertainty over what the Federal Reserve would do at its meeting next week fueled volatility, boosting the VIX by nearly 50%.

Investors looked ahead to the Federal Reserve's September 20-21 meeting. Speculation about the timing of the Fed's next interest rate hike has shaken major stock indexes this week following contrasting comments from Fed officials.

In a speech earlier this week, Fed Governor Lael Brainard warned against raising interest rates too quickly. The comments came after Boston Fed President Eric Rosengren said late last week that low interest rates are increasing the chance of overheating the U.S. economy.

Markets are pricing in just a 9% chance of a rate hike at the Fed's September meeting, according to Investing.com's Fed Rate Monitor Tool.

Adding to the recent spate of market volatility are fading expectations of drastic easing steps from the Bank of Japan, which also meets on September 20-21.

Sources familiar with the BOJ's thinking said the central bank will consider making negative interest rates the focus of its future easing by shifting its prime policy target to interest rates from base money.

The sources added that there is still no consensus in the BOJ yet on whether to deepen negative rates at next week's meeting, when it conducts the comprehensive assessment of its policies.

To see more of Investing.com’s weekly comics, visit: http://www.investing.com/analysis/comics

Weekly Comic: Will Yellen kill the recent trend of spiking volatility or is it here to stay?

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