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Financial market stress was little changed over the past week according to the St. Louis Fed Financial Stress Index (STLFSI). For the week ending March 7, 2014, the STLFSI measured -1.036, up slightly from the previous week, when it measured -1.046.
Over the past week, 10 of the 18 indicators contributed positively to the weekly change in the STLFSI. The two largest positive contributions were made by the STLFSI’s bond and equity market volatility measures—the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo) and the Chicago Board Options Exchange Market Volatility Index (VIX), respectively. The largest negative contributions over the past week were made by the expected inflation rate over the next 10 years (BIR_10yr) and Standard and Poor’s financial stock price index (SP500_FI).
Financial market stress remained above its year-earlier level for the sixth week out of the past seven. Over the past 52 weeks, 11 of the 18 indicators contributed positively to the change in the STLFSI, one more than the previous week. Measured from a year earlier, seven of 18 indicators contributed negatively to the index. The largest positive contribution over the past year was made by the BIR_10yr and the largest negative contribution was made by the spread between Baa-rated corporate bonds and 10-year Treasury securities (Corp_CRS).
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.