War or recession needed to break persistent low volatility - Goldman Sachs

Fed tightening 'not enough'

Tom Eckett
clock • 1 min read

A large shock such as a recession or a war, rather than tightening from central banks, is needed to help jolt market volatility from record low levels, according to Goldman Sachs.

According to Bloomberg, Goldman Sachs strategists Christian Mueller-Glissmann and Alessio Rizzi said periods of low volatility such as the current one have lasted on average as long as two years. They said it was unlikely fears of Federal Reserve tightening would cause increased volatility, despite swings in the VIX, or the Fear index, over past week. Last month at its latest FOMC meeting, the Fed hiked interest rates for the second time this year but also spoke about tightening its balance sheet towards the end of the year, effectively beginning to reverse the quantitative easing pro...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

IFS: Reeves must plug £22bn fiscal hole to restore 'tiny' headroom

IFS: Reeves must plug £22bn fiscal hole to restore 'tiny' headroom

Think tank urges chancellor to avoid 'limping from one forecast to the next'

Linus Uhlig
clock 16 October 2025 • 2 min read
Why higher bond yields aren't causing a Mini-Budget meltdown

Why higher bond yields aren't causing a Mini-Budget meltdown

'One thing we know about Rachel Reeves is she will live or die by her fiscal rules'

Laith Khalaf
clock 07 October 2025 • 5 min read
City 'has lost sympathy with this Labour government' - George Osborne

City 'has lost sympathy with this Labour government' - George Osborne

Former chancellor defends the OBR

Michael Nelson
clock 01 October 2025 • 3 min read