Financial Market Stress Declines for Fifth Consecutive Week

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

The St. Louis Fed Financial Stress Index (STLFSI) measured -1.198 for the week ending April 17. The STLFSI declined for the fifth consecutive week and remained at its lowest level since the week ending Nov. 28, 2014. Year to date, the STLFSI has averaged -1.021, appreciably higher than its average over the comparable period in 2014 (-1.312).

Over the past week, 13 of the 18 indicators contributed negatively to the STLFSI, one 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) and the Chicago Board Options Exchange Market Volatility Index (VIX). Three of the 18 indicators contributed positively to the weekly change in the STLFSI, three fewer than the previous week. The largest positive contribution was made by the difference between the yield on the 3-month U.S. Treasury bill and the 3-month Eurodollar rate (TED).

Over the past year, 11 of the 18 indicators made a positive contribution to the index, one more than last week. The largest positive contribution over the past year was made by the expected inflation rate over the next 10 years (BIR_10yr), followed by the Mlynch_BMVI_1mo. Seven indicators made a negative contribution to the index, one fewer 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.