What move the vol ?

A swaption's implied volatility is the price of expected rate dispersion.
Five key drivers dictate its movement:
=> The policy path: Captures uncertainty around upcoming meetings. Short expiries thrive on this—cycle turning points lift them immediately, while forward guidance suppresses them.
=> Inflation, term premium, and supply: The core fuel for long tenors. An energy shock impacts a 3y10y via inflation and term risk rather than immediate central bank meetings.
=> Realized volatility: Implied volatility anchors to realized vol plus a risk premium
=> Market flows: Callable issuance and structured notes supply volatility, whereas mortgage hedgers, insurers, and tail-risk buyers demand it. Flows ultimately dictate both the level and the shape of the surface.
=> The level of rates: Volatility scales with the absolute level of interest rates in basis points—the same relative uncertainty is worth more in bps in a 5% rate environment than at 1%.

The MOVE index summarizes everything