US Treasury Warns Investors Underestimate “Potential For A Market Reversal”, Take “Low Volatility For Granted”

Thursday, December 4, 2014
By Paul Martin

by Tyler Durden
ZeroHedge.com
12/04/2014

“Investors may have taken low volatility for granted and underestimated the potential for a reversal. While quantitative easing policies are intended to encourage investors to buy risky assets, there is also a risk that the perceived reversal of such policies will lead investors to turn the other way, triggering market instability…. Similarly, investors may have become too sanguine about the availability of market liquidity — the ability to transact in size without having a significant impact on price — during both good times and bad. Accommodative global monetary policy, coupled with the Federal Reserve’s purchases of large amounts of low-risk assets and changes in risk sentiment, helped to compress volatility and risk premiums. ”

The Rest…HERE

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