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Markets are experiencing a correlation break, with oil prices tumbling while expectations for Federal Reserve policy are moving in a more hawkish direction, leading to dollar strength and pressure on gold.
Robin Brooks stated that such correlation breaks typically do not last and emphasized that markets are currently trading based on backward-looking data.
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Earlier this month, Robin Brooks described the recent spike in the VIX tied to S&P 500 options and AI debt concerns as relatively minor. He also noted that Persian Gulf oil exports have normalized following temporary increases in shipping costs. These observations add context to current price movements across major markets.