The futures on CBOE Volatility Index (VIX) gain 1.1% today, rising above 21 as uncertainty around today Donald Trump tariffs anonucmenet (so-called Liberation Day) increases hedging demand on Wall Street.
- The Trump team has considered imposing a 20% universal tariff on virtually all imports, as opposed to a reciprocal plan that would impose different tariffs on various countries.
- Yesterday, media reported that President Trump's economic team is preparing a new tariff option for him in the final hours before his trade policy announcement on April 2.
- Now, according to anonymous sources familiar with the plans, the US Trade Representative's office is preparing a third option which is an across-the-board tariff on a subset of nations that would likely be less than the 20%, 'previous' universal tariff option.
Despite that fact, sentiment suggests further risk-off behavior on Wall Street, and even that option may not be enough to support the indices. VIX volatility has been very high in recent days; however, several attempts at a 'VIX crush' have failed due to a 'sleeping fear' in the markets. Trump's tariffs will go into effect immediately after the announcement on Wednesday.
Source: xStation5
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