>>> WELCOME BACK VOLATILITY TRADING NEAR THE LOWS OF THE YEAR, EVEN WITH WORRIES OVER INFLATION WE'LL GET NEW READINGS ON PPI AND CPI IN THE NEXT COUPLE OF DAYS WHAT IMPACT COULD THEY HAVE ON THE MARKET MA MANDY ZU IS WITH US. >> GREAT TO BE HERE. >> WHY IS VOLATILITY SO LOW THESE DAYS YOU WOULD THINK WITH SO MANY UNKNOWNS THAT IT WOULD BE HIGHER THAN SUB-14. >> NO, IT'S DEFINITELY INTERESTING AS WE HEAD INTO THIS WEEK'S CPI NUMBER. THAT VOLATILITY IS LOW, NOT JUST FOR EQUITIES, WHEN YOU LOOK AT THE VIX, BUT ACROSS AS SELL CLASSES. BOND MARKET, CREDIT, CURRENCY, EVERYTHING IS NEAR ONE-YEAR LOWS, AND I THINK THAT'S BECAUSE AT THIS POINT, INFLATION AS A RISK OF -- I THINK HAS COME TO TERMS WITH THE FACT THAT IT'S GOING TO BE STICKIER THE LONGER, AND THE FACT THAT THE FED IS NOT PANICKED ABOUT IT. IF THE MARKET PANICS WHEN THE FED PANICS WHAT WE HEARD FROM POWELL IS HE'S NOT CONCERNED, RIGHT? HE'S NOT IN A HURRY TO RAISE RATES, EITHER KEEP RATES UNCHANGED, OR CUT, AND THAT'S, YOU KNOW, I THINK VOLATILITY SUPPRESSING. >> THERE SEEMS TO BE STRATEGIES IN PLACE WHERE ANY VOLATILITY SPIKE IS SOLVED, BECAUSE WE CAN CREATE A SYNTHETIC DIVIDEND. WE MIGHT BE OUT OF MONEY FOR A DAY OR TWO, BUT THE VOLATILITY EVENTS DON'T LAST. IS THAT JUST AS EASY AS IT IS RIGHT NOW? ANY SPIKE IN VOLATILITY IS SOLD AND PEOPLE ARE TAKING ADVANTAGE OF THAT? >> WHAT'S INTERESTING ACTUALLY GOING INTO APRIL SELLOFF, A MODEST 5% PULL-BACK IN THE MARKET, IN THE VIX, SPIKED TO 19 WAS ACTUALLY WE SAW VERY ELEVATED OPTION ACTIVITY IN THE VIX INDEX OPTIONS. SO, A LOT OF PEOPLE GOING INTO A POSITIONING FOR VOLATILITY SPIKE, AND DURING MONETIZING THAT SPIKE, EXACTLY TO A POINT THEY RECOGNIZE VOLATILITY SPIK S TEND TO BE VERY SHORT LIVED. SO, IF YOU RECALL IN MID APRIL WHEN WE HAD THAT CALL WHEN VIX SPIKED TO 19, WE HAD MORE VIX OPTIONS TRADE ON THAT DAY THAN ANY POINT IN MARCH OF 2020 DURING THE PAN SEMIIC WHEN THE VIX SPIKED TO 90 I THOUGHT THAT WAS INTERESTING >> MANDY, THANK YOU FOR BEING HERE SO, THERE'S NOT SOMETHING STRUCTURAL ABOUT THE VIX IT'S REALLY JUST THE MARKET'S RELATIVE COMPLACENCY WITH WHAT USED TO BE BIG NEWS? >> SO, THAT'S THE DEBATE PEOPLE ARE HAVING IS THERE SOMETHING IN THE EQUITY MARKET THAT IS SUPPRESSING VOLATILITY AND ONE COMMON REASON THAT GETS BROUGHT UP IS THE PROLIFERATION OF THESE VOL SELLING STRATEGIES. OUR VIEW IS THAT THEY'RE NOT THE MAIN REASON FOR VOLATILITY, BECAUSE LIKE I POINTED OUT, WE'RE SEEING LOW VOLATILITY ACROSS ASSET CLASSES, RIGHT? IN CREDIT, IN FX, IN RATES, WHERE THESE STRATEGIES ARE NOT AS COMMON. AND WE'RE ALSO SEEING LOW VOLATILITY ACROSS REGIONS IN EMERGING MARKETS, IN DEVELOPED MARKETS, OUTSIDE OF THE U.S., SO, TO ME, THAT'S REALLY A SIGN THAT IT'S A MACRO FUNDAMENTAL. WE'VE GONE FROM FEARING A RECESSION TO NOW FIRMLY ON THE PATH TO SOFT LANDING OBVIOUSLY WITH
