VIX Hits Pre-Pandemic Lows in 2023 as Investor Complacency Grows Despite Lingering Economic Uncertainty

The CBOE Volatility Index (VIX) has fallen to lows not seen since before the pandemic, indicating remarkably low market volatility in 2023.
The VIX spikes when investor uncertainty is high and is often negatively correlated with market returns. It hit all-time highs in 2020 and 2008 during recessions.
The VIX declined to 12.8 in September 2022, the lowest since January 2020, as investors scale back recession fears given moderating inflation and labor market strength.
Consumer spending remains strong despite 11 rate hikes, given still-low unemployment and solid wage growth, supporting economic growth.
Some argue investors are complacent despite potentially weakening economic data, but resilience is currently muting market reactions.

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Posted 9/20/2023, 5:43:25 PM