Key Takeaways:
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- VIX expected to average 16 in 2025
- BofA predicts 5x increase in fragility shocks
- Cross-asset hedging strategies gaining popularity
- Trump policies could trigger volatility spikes
- Options selling expected to continue dampening swings
What Happened?
Major banks including JPMorgan, Bank of America, and BBVA forecast periods of market calm interrupted by sharp volatility spikes in 2025, driven by uncertainty around Trump’s economic policies and geopolitical tensions.
Why It Matters?
The outlook suggests:
- Increased hedging importance
- Potential market disruptions
- Cross-asset correlation risks
- Options strategy shifts
- Portfolio protection needs
What’s Next?
Watch for:
- Trump policy implementation
- VIX level changes
- Options market positioning
- Cross-asset correlations
- Geopolitical developments