The Volatility Index (^VIX) surged to 58, its highest level since August, following Fed Chair Powell’s press conference, which provided limited guidance on monetary policy direction after Wednesday’s 25 basis point rate cut.
HSBC Global Private Banking and Wealth Global CIO Willem Sels joins Catalysts to share his market (^DJI, ^IXIC, ^GSPC) outlook.
Sels explains that market volatility is increasing because early 2025 will bring "a period where you have lots of policy announcements and therefore, then, people trying to assess what is going to be the impact on the economy, on inflation, and therefore on the Fed policy as well." This uncertainty, he notes, is driving the current volatility spike.
"In the equity market space, you have the positive side and a negative side together," Sels adds, highlighting the economy’s resilience, sustained earnings growth, and prospects for deregulation and innovation. He remains optimistic about market performance in the upcoming year, suggesting investors should "see volatility as an opportunity."
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