Capital markets are taking distortion to a whole new level. On Monday, the U.S. stock market achieved an even greater level of placidity, as the CBOE Volatility Index for the S&P 500 closed with a “9” handle for the first time in more than a decade. It also fell to its lowest level in history based on its current construction. This suggests that investors are feeling as confident as they ever have about the U.S. stock market remaining calm and volatility remaining low into the future. Is this investor calm truly a product of market harmony? Or is it simply an ominous byproduct of excessive policy crosscurrents that may ultimately send investors on another wild loop.
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