The White House has announced that former President Trump will make an economic announcement soon, but we don’t have any details yet. In other news, Stephen Miran has been chosen to temporarily take Kugler’s place on the Federal Reserve Board. While this appointment has been decided, it isn’t permanent at the moment.

Economic Announcement and Market Uncertainty

The upcoming announcement from the White House is creating a lot of uncertainty in the market. This follows the nomination of Stephen Miran to the Federal Reserve Board, which is still pending approval. Traders should brace for increased volatility in the coming weeks. Market anxiety is evident in options pricing. The VIX, which measures expected volatility, has risen to 18.5 in early August 2025, compared to a July average of 15. July’s inflation report showed a higher-than-expected 3.6% CPI, leaving the market anxious about future fiscal and monetary policies. Miran’s nomination hints at a more dovish approach from the Fed, potentially leading to lower interest rates. This creates a conflict for traders, as possible rate cuts might be counteracted by new trade or tariff policies from the White House. This back-and-forth between the Fed and the White House will likely shape market movements. Historically, we saw a similar trend after the 2024 election. The market experienced a brief rally due to hopes of deregulation, followed by a sell-off early in 2025 when tariff threats against Asian imports returned. This pattern suggests any policy announcement could lead to sharp swings in market activity.

Strategies for Navigating Market Volatility

In light of this, buying volatility is a smart approach. We should consider purchasing September straddles or strangles on the SPY and QQQ. This strategy can profit from significant price movements in either direction, without needing to predict the announcement’s outcome. We should also keep an eye on sectors that are particularly sensitive to policy changes. Options on industrial ETFs like XLI or energy ETFs like XLE could experience notable price fluctuations. Any talk of tariffs may stir up volatility in retail and manufacturing stocks. The uncertainty surrounding Miran’s confirmation offers another trading opportunity. Options on Treasury bond ETFs like TLT could be a good way to speculate on future interest rates. If the confirmation goes through successfully, we might see a bond rally as the market prepares for a more dovish Fed. Create your live VT Markets account and start trading now.

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