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Financial market stress experienced little change in the current reporting week compared with a week earlier. For the week ending Oct. 11, 2013, the St. Louis Fed Financial Stress Index (STLFSI) measured -0.561, a slight dip from its value of a week earlier (-0.547).
As seen in the chart above, relative to the past week, 13 of the 18 indicators contributed negatively to the change in the STLFSI, a marked change from the prior week, when only five indicators made negative contributions. Compared with the previous week, the largest negative contribution was made by the Merrill Lynch bond market volatility index (Mlynch_BMVI_1mo), while the largest positive contribution was made by the equity market volatility index (VIX).
The STLFSI remains modestly above its year-earlier level. Over the past 52 weeks, the STLFSI has increased from -0.663 to -0.561. Compared with a year earlier, 11 of the 18 indicators contributed negatively to the change in the STLFSI, while seven indicators made positive contributions. Like last week, the spread between yields on high-yield corporate bonds and 10-year U.S. Treasury securities (HighYield_CRS) made the largest negative contribution to the STLFSI over the past year, while the largest positive contribution was made by the expected inflation rate over the next 10 years (BIR_10yr).
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.