VIX Hits 2025 Low as Traders Bet on Warsh Fed Pick
The fear gauge dropped to 14.1 as Wall Street grows comfortable with Kevin Warsh as a potential Fed chair candidate.
The market's fear gauge just flashed green. The Cboe Volatility Index — the VIX — touched a year-to-date low of 14.1, and traders are pointing to one name: Kevin Warsh. Wall Street is warming up fast to the idea of Warsh stepping into the Fed chair role, and options markets are pricing in a lot less panic as a result.
A VIX reading of 14.1 is calm territory. Anything under 20 generally signals traders aren't bracing for big swings. The drop tells you the crowd isn't hedging hard right now — they're leaning into risk, not running from it. That's a meaningful shift from the anxiety that dominated earlier in the year.
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Warsh is seen by many market participants as a market-friendly pick — someone who understands Wall Street's language. If traders believe a Warsh-led Fed would prioritize stability and communicate clearly, it makes sense they'd unwind protective options positions. Less hedging demand means lower implied volatility, and that's exactly what the VIX is reflecting right now.
Don't get complacent, though. The VIX can reverse hard and fast. A single policy surprise, a hot inflation print, or a geopolitical shock can send it spiking back above 20 before you finish your morning coffee. Low volatility is an opportunity — but it's also a trap for traders who forget that calm markets don't stay calm forever. Use the quiet to position, not to sleep.
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