Definition
MOVE Index
The MOVE index measures expected volatility in the US Treasury bond market, often called the 'VIX for bonds', signalling stress in the world's most important debt market.
While the VIX tracks equity-market fear, the MOVE index gauges expected swings in US Treasury yields. Because Treasuries anchor global borrowing costs, a spiking MOVE signals bond-market stress that can ripple into all assets.
Sharp rises in the MOVE often accompany Fed-policy uncertainty or financial scares, tightening global financial conditions and pressuring emerging-market flows. Indian bond and currency markets feel the knock-on effects when US rate volatility surges.
Related terms
- Federal Reserve (US Fed)The Federal Reserve is the central bank of the United States, setting US interest rates and money supply, with policy decisions that ripple across global markets including India.
- Yield Curve InversionA yield curve inversion occurs when short-term bond yields exceed long-term yields, historically one of the most reliable warning signs of an approaching recession.
- VIX (CBOE Volatility Index)The VIX is Wall Street's fear gauge, measuring the market's expected 30-day volatility of the S&P 500 from option prices, with high readings signalling investor anxiety.
- Term PremiumThe term premium is the extra yield investors demand for holding a long-term bond instead of repeatedly rolling over short-term bonds, compensating for future rate and inflation uncertainty.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.