Market Volatility and Rising Interest Rates …
What’s Going on with my Life Insurance Policy?
The Volatility Index (VIX), which measures investor expectations of market volatility, has spiked.
From trading around 10 at the start of the year, the index rose to 37 on February 5 before retreating to the 20-range. This indicates a dramatic swing in expected volatility in 2018. https://www.bloomberg.com/quoteNIX:IND
Meanwhile, the U.S. 10-Year Treasury, a leading measure of long-term interest rates, is approaching 3%-a level not seen since May 2011-and inflation is ticking up.
It seems the market is absorbing the implications of recent changes that will impact the economy. How might the recent tax cuts and two-year budget agreement impact fiscal policy and further spur rising government debt? Does an uptick in inflation imply higher interest rates in the future?