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St. Louis Fed Financial Stress Index (STLFSI) rises for fourth consecutive week


St. Louis Fed Financial Stress Index Chart

Financial market stresses rose for the fourth consecutive week, according to the St. Louis Fed Financial Stress Index (STLFSI). For the week ending Sept. 6, 2013, the STLFSI measured -0.357, a modest increase from last week’s reading of -0.421. The index remains well below its peak during this business expansion (0.823), which occurred the week ending Oct. 7, 2011.

 weekly change

As seen in the chart above, nine of the 18 indicators that are used to construct the STLFSI increased from the previous week and eight indicators made a negative contribution. Relative to the previous week, the largest positive contribution this past week was made by the Merrill Lynch bond market volatility index (Mlynch_BMVI_1mo). The largest negative contribution was made by the spread between yields on corporate Baa-rated bonds and 10-year Treasury securities (Corp_CRS). 

yearly change

The STLFSI rose above its year-earlier value for the first time in a little more than a year (week ending July 27, 2012). Still, over the past year, 11 of the 18 components made negative contributions to the index, while the remaining seven components made positive contributions to the index, as seen in the chart above. For the fourth straight week, the largest negative contribution (change from the previous year) was made by the Corp_CRS and the largest positive contribution over the past year was registered by the Mlynch_BMVI_1mo.

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