Investor uncertainty in the US - Data and Analysis (1990-2032)

In 2026, investor uncertainty is set to continue to increase, with the VIX projected to rise 6.4% to reach an average index value of 20.2, after already rising 22.3% in 2025. This shift from the easing trend in 2024 is primarily due to renewed concerns over US tariff implementation under a new administration, and, more recently, the conflict in Iran. After a period of stability from interest rate pauses and cuts, anticipated restrictive trade policies have prompted greater risk aversion and heightened market volatility.From 2021 to 2025, investor uncertainty exhibited high volatility, influenced by health, geopolitical events and shifts in monetary policy. The volatility index returned near historical norms in 2021 after the pandemic shock, but uncertainty remained due to ongoing COVID-19 threats, renewed lockdowns in China, and supply chain disruptions. The US Federal Reserve's significant interest rate hikes in 2022, in response to rising inflation, spiked market uncertainty and triggered stock selloffs. The Russian invasion of Ukraine amplified global uncertainty, while escalating inflation rates impacted investor sentiment worldwide. By 2023, anticipation of a Federal Reserve pause in rate hikes reduced uncertainty, fostering optimism that avoided a severe downturn. The trend continued into 2024 with rate reductions, though the global economic environment remained sensitive to conflicts and policy changes.During this period, macroeconomic factors such as fluctuating monetary policy, significant geopolitical events, and global health crises were central to shaping investor uncertainty. Inflationary pressures and their impact on economic policy influenced asset allocation and demand for safe-haven investments. The uncertainty index's sensitivity to domestic and international policies underscores the global interconnectedness of capital markets and the importance of stable macroeconomic conditions for investor confidence.Over the five years to 2026, the investor uncertainty index increased at a CAGR of 0.5%, with volatility exposed to economic shocks and rapid policy shifts. The period was marked by alternating phases of risk aversion and optimism, closely tracking major policy decisions and external shocks.