re: "Volatility Is Lowest Since the Great Depression"

I can argue some of the semantics but mostly all you have is pretty spot on.

If you really want to see how the Fed has taken volatility out of the market, if you have access to Bloomberg go to the NSV screen. This is the Normalized Swaption Volatility screen that you can use as a proxy for rate volatility. It's basically been in a primary trend nose dive since the beginning of QE. The stock market on training wheels comment is pretty spot on as well, the Fed has a lot of leeway right now with how they can affect markets by unwinding the current programs but the effectiveness of additional measures will continue to decline.

A big question a lot of investors have is can rates go back up to "historical" levels under the current volatility of rates? Calculating the VIX is really, really damn complicated but rate volatility is more simple, relatively. Basically how much are investors willing to pay for vol in rate instruments (usually using some version of Black-Scholes). Until Fed minutes start getting more and more hawkish I think we will still have gradual movement one way or the other. You're not going to get some 1994 shock with the Fed as big of a current player in the market.