Chart of the Week: Transitory Market Fear of Inflation

Chart of the Week | August 16, 2021
Macro Insights

Transitory Market Fear of Inflation

• The market fear gauge (VIX) looks to have normalized since the onset of inflationary fears in the second half of 2020 into the first half of 2021.
• The VIX is currently hovering around 20, which is in line with the average VIX reading since 1990 (19.57).
• The increasing spread between inflation and the VIX shows that the market fear for inflation may be cooling off, illustrating that the transitory inflation argument may have substance.