Iran sanctions and Canada's retaliatory tariffs landed within days of each other this week, yet the VIX barely reacted, staying inside the narrow range it has held since early August. Behavioural economists Daniel Kahneman and Amos Tversky's availability heuristic offers an explanation: repeated shocks without matching losses make each additional one feel less probable, not more. Jackson Hole on Friday and the Bank of Canada's September 2 decision are the next tests of whether that compression holds.
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