With realized volatility having fallen to near-record lows this month, CME Group Chairman and CEO Terry Duffy tapped into the trepidation that many traders feel about today’s unsettlingly placid markets during an interview with CNBC Thursday, saying that he’s “surprised” at the present lack of volatility, adding that many market participants are essentially too afraid to trade.

Ultimately, the torrid pace of this year’s advance in global stocks, which has sent US shares sailing through record high after record high, has made traders too fearful to sell for fear of missing out on further gains - but they’re also too afraid to buy because of the precarious situation with North Korea, and uncertainty surrounding the path of domestic fiscal and economic policy.

To be sure, subdued volatility isn’t happening in isolation. Low rates and low commodity prices (among a host of other factors) have helped propell shares higher. But right now, markets are essentially in a “wait and see mode.”

“It’s a function of volatility, but that’s not the only component, you know, you’re looking at low interest rates you’re looking at commodity prices being depressed, you’re looking at a whole host of issues. And right now, people just aren’t trading the markets, they’re afraid to buy, they’re afraid to sell at the equity markets because of the levels were trading at right now i think it’s a wait and see game.”

CME Group CEO: Tax reform would allow us to reinvest in our business from CNBC.

Asked for his thoughts on tax reform, Duffy said it will be the “biggest issue” for equity markets in the coming months, regardless of outcome.

“Corporate tax reform is the biggest issue that will have a shakeup in the equity markets, one way or the other.” “There’s no question about it, we’re one of the highest tax payers people are referring to, so yes it would allow us to reinvest in our business and grow, but yes it does fall through the bottom line.”

Duffy, like many others in his line have work, has struggled to find a suitable justification for the contemporary low volatility environment, adding that he’s seen geopolitical incidents that were orders of magnitude less terrifying than the standoff between President Donald Trump and North Korean leader Kim Jong Un rattle markets.

“I’m surprised by the lack of volatility. I’ve been around this business a long time, I’ve seen some geopolitical events make people’s teeth rattle, and what you’re seeing recently which traditionally would’ve moved markets is just not doing it.”

Of course, the current regime can’t last forever...and a correction will probably begin sooner than people think...

“People get jaded to volatility because of current events in North Korea, or other geopolitical events...whether we’re going to have oversupply or undersupply. But certain hings will change the fundamental factors of the market place.” “And in return, you’re going to see a change in pricing not only in interest rates, but in equities and all different products.” “You saw that when West Texas Intermediate traded at $92 a barrel for years, then next thing you know, it was $26.50 a barrel.” “When volatility comes, it comes fast and furious.”

Asked about recent criticisms of clearinghouses levied by National Economic Council head Gary Cohn, Duffy rebutted Cohn’s assertion that clearinghouses like CME threaten financial stability. Quite the opposite, Duffy said.

“I don’t believe they present a systemic problem. I did not get a chance to talk with Mr. Cohn, but the very next day, the federal government released its assessment of clearinghouses, and it showed that two could fail and the system could still function...I don’t agree with those comments for CME Group, most of the stuff we clear is futures and options and base products...what I imagine Mr. Cohn was referring to was the swaps clearing...we don’t do a tremendous amount of swaps clearing here at CME. It’s mostly base products.”

“What clearinghouses do to mitigate risk has been a major benefit to the US financial system.”