Goldman Sachs: A large shock such as recession or war needed to break low volatility

Goldman Sachs strategists Christian Mueller-Glissmann and Alessio Rizzi out with their latest note, citing that recent pickup in volatility unlikely to be sustainable without a large shock.

Key Quotes via Bloomberg:

It'll take more than central bank tightening to increase market volatility

A large shock such as recession or war is usually required

That's generally been the case for the 14 similar low volatility "regimes" since 1928, at least in equity markets

"Volatility spikes have been hard to predict as they often occur after unpredictable major geopolitical events, such as wars and terror attacks, or adverse economic or financial shocks and so-called 'unknown unknowns' (e.g. Black Monday in 1987),"

"Recessions and a slowing business cycle have historically resulted in a high vol regime across assets."