REAL ECONOMY BLOG | August 05, 2025
Days of repose. Perhaps that is the best description of the lazy days of summer across financial markets.
Moderation of volatility in equity and bond markets prevailed, along with a general optimism that tech and financial valuations would drag the rest of the market.
That ended this past Friday.
Conditions are aligning for a return of financial market volatility for the rest of the year due to the massive revisions to U.S. employment data and broad concerns over the reliability of federal government-produced economic statistics.
Both the VIX index of S&P 500 volatility and the MOVE index of the U.S. Treasury market volatility managed to drop below their long-term, non-recessionary averages in recent weeks. We expect that to end as the market focuses on how trade taxes will affect the real economy through inflation and employment channels.
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This article was written by Joseph Brusuelas and originally appeared on 2025-08-05. Reprinted with permission from RSM US LLP.
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