LONDON (Reuters) – The CBOE’s volatility index, Wall Street’s fear gauge, hit a seven-week high on Monday morning on mounting risk of more aggressive rate hikes from the Federal Reserve and European Central Bank.
The volatility index, or VIX, jumped 7.4 points to 27.46, its highest level since July 14.
Europe’s equivalent, the euro STOXX 50 volatility index, jumped 2.7 points to as much as 29.606, its highest level since July 19.
The surge in volatility came as stock markets across the globe tumbled, with the pan-European STOXX 600 index dropping 1.0% to a more than one-month low. Wall Street futures are lower by 0.8%-1.2%.
Fed Chair Jerome Powell warned on Friday that the U.S. central bank would raise rates as high as needed to restrict growth and keep them there “for some time”.
Meanwhile, ECB board member Isabel Schnabel warned over the weekend that central banks must act forcefully to combat inflation even if that dragged economies into recession.
(Reporting by Samuel Indyk; editing by John O’Donnell)
