St. Louis Fed Financial Stress Index continues to climb to -0.201 from previous week's -0.321

The St. Louis Fed Financial Stress Index (STLFSI) rose for the seventh consecutive week, measuring -0.201 for the week ending June 28, 2013. However, because the STLFSI remains below zero, it continues to signal below-average levels of financial market stress. In the previous week, the STLFSI measured -0.321.

As seen in the chart above, 10 of the 18 indicators that are used to construct the STLFSI increased from the previous week. For the second consecutive week, the Merrill Lynch bond market volatility index registered the largest positive contribution. The next two largest positive contributions over the past week were the Merrill Lynch High-Yield Corporate Master II Index (yield) and the yield spread between the Merrill Lynch High-Yield Corporate Master II Index and the 10-year U.S. Treasury security. The component registering the largest negative contribution to the STLFSI over the previous week was the nominal yield on the 10-year U.S. Treasury security.

The STLFSI remains below its level from a year earlier, when it measured -0.058 for the week ending June 29, 2012. As seen on the chart above, over the past 52 weeks, 13 of the 18 components have made negative contributions to the index, of which, the largest has been the yield spread between the Baa-rated corporate bond and the 10-year U.S. Treasury security. The component registering the largest positive contribution over the past year was the Merrill Lynch bond market volatility index.

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