Reshaping Fed Policy and Implied Volatility in Copper Jul 01, 2021 Reshaping Fed Policy and Copper’s Elevated Implied Volatility By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group Ending Fed Emergency Supports Fed signals earlier-than-expected exit from zero rates, tapering of asset purchases. A return to pre-pandemic norms might mean ending emergency supports. Biden administration appointments to Fed could help reshape monetary policy. Second-half 2021, 2022 economic data could be crucial to data-dependent Fed. Watch video Elevated Implied Volatility in Copper Implied volatility fell from a 40-50% high in 2008 to 12% by 2019. Copper implied volatility surged to 30-35% early in the pandemic. Implied volatility did not retreat even as prices hit record highs in 2020. Implied volatility hovering around 22.5% indicates market uncertainty. Listen to podcast SEE MORE ANNOUNCEMENTS