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Quiet Bond Market: Volatility Index Hits Multi-Year Lows
11 Dec, 2025
Summary
- Bond market volatility has significantly decreased since April.
- Implied volatility index has fallen to its lowest levels since 2021.
- This calm follows a period of explosive volatility earlier in the year.
Following a period of significant turbulence earlier this year, the bond market has exhibited a notable decrease in volatility. Investor expectations, as reflected in derivatives markets, suggest a substantial calming, with the implied volatility index showing a consistent decline since April.
This index has now reached levels not observed since 2021. The market's current stability contrasts sharply with the explosive movements experienced previously, particularly around the time "Liberation Day" when tariffs were announced.
The shift toward more predictable yield movements indicates a potential change in investor outlook. The bond market appears to be moving away from its earlier unpredictable patterns toward a more measured and stable environment.
