I’d say markets were “nervously” eying the Fed on Wednesday, but I’m not sure that’d be accurate.

This is purely anecdotal, but I’ve personally never seen as many summer “Out of office,” “Automatic reply” vacation e-mail rebounds as what I’ve witnessed over the past two weeks.

It’s as if the complete disappearance of equity volatility is facilitating holidays and sojourns on top of the usual seasonal getaways.

“The end of July will bring a 25bps [Fed] hike and the commencement of more entrenched summer trading conditions as August gets underway and out of office replies replace any significant conviction,” wrote BMO’s Ben Jeffery and Ian Lyngen, who often joke about automatic e-mail replies as an unofficial indicator.

“Crazy, or should we say lazy, eights — SPX 1m realized vol at 8.88,” Macro Risk Advisors’ Dean Curnutt remarked. That’s 6%ile over the last three years, if you’re keeping track at home.

Of course, stability breeds instability. As Nomura’s Charlie McElligott put it last week, the “risk is that with such low absolute levels of base-Vol [and] with exposure so impulsively large of late, it will not take much of a disruption to see a potentially outsized deleveraging impulse.”

But you need that disruption — something to break the spell. Vol control funds have re-leveraged such that their equity allocation is historically high, and according to a Deutsche Bank metric, their sensitivity to a sizable equity selloff is likewise elevated (figure on the right, below).

Last week, McElligott flagged the potential for de-leveraging from vol-sensitive strats, noting that the threshold in terms of average market moves is now much lower.

Could Jerome Powell be the catalyst? I personally doubt it. Certainly, there’s scope for algorithmic traders to “misinterpret” his remarks, prompting the usual press conference “chop” and reversals, but it wasn’t exactly a mystery that Powell intended to nod politely at welcome progress on the inflation front while being careful to preserve the Fed’s optionality vis-à-vis an additional hike after Wednesday’s.

“Economic growth has likely been too firm in recent months for… Powell to signal that Wednesday’s increase will be the last of the current tightening cycle,” Wall Street Journal “Fed whisperer” Nick Timiraos wrote.

Bloomberg ran a story juxtaposing price action in the half-hour after the FOMC statement release and the hour encompassing Powell’s press conference. That’s silly, in my opinion. You can’t glean anything from that. I prefer the two-day SPX move inclusive of FOMC day and the session thereafter.

Stocks came into the July gathering aiming for record highs by summer’s end. Or by month-end, even. Who knows.

I, for one, wouldn’t be averse to some volatility. A little action in the price action to shake whoever’s not “out of office” out of an apathetic summer torpor.

If there’s any hope of that, it probably rests with the balance of this week’s data, including and especially Friday’s “supercore” PCE print and the ECI update, not with Powell.