The VIX climbed from a one-month low near 14 in early September to nearly 18 after the Federal Reserve raised its policy rate for the first time since 2023, even though the move had been signalled in the Committee's own projections weeks earlier. Behavioural finance attributes the outsized reaction to loss aversion and the availability heuristic: a telegraphed decision can still feel like a shock once clients have gone three years without living through a hike.
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