Financial Market Stress Falls for Fourth Consecutive Week

Please note: Data values previously published are subject to revision. For more information, refer to the vintage series in ALFRED®.

Financial market stress has fallen to its lowest level since the week ending Nov. 28, 2014, according to the St. Louis Fed Financial Stress Index (STLFSI). For the week ending April 10, 2015, the STLFSI measured -1.154, down modestly from the previous week’s revised value of -1.076. This was the fourth consecutive weekly decline.

Over the past week, 12 of the 18 indicators contributed negatively to the STLFSI, three more than the previous week. The largest negative contributions over the past week were made by the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo), the Chicago Board Options Exchange Market Volatility Index (VIX) and the expected inflation rate over the next 10 years (BIR_10yr). Six of the 18 indicators contributed positively to the weekly change in the STLFSI, one fewer than the previous week. The largest positive contribution was made by the yield on the 30-year U.S. Treasury security (Treas30y).

Over the past year, 10 of the 18 indicators made a positive contribution to the index, one fewer than last week.  The largest positive contribution over the past year was made by the Mlynch_BMVI_1mo. Eight indicators made a negative contribution to the index, one more than last week. The largest negative contribution was made by the yield on corporate Baa-rated bonds (BAA).

For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.