The St. Louis Fed Financial Stress Index (STLFSI) posted its largest weekly decline in 10 weeks. For the week ending April 25, 2014, the STLFSI measured -1.171, down from last week’s revised value of -1.116. The index fell for the third consecutive week and was at its lowest level since the week ending March 15, 2013.
Over the past week, 11 of the 18 indicators contributed negatively to the weekly change in the STLFSI, which was two more than the previous week. The largest negative contribution was made by the Chicago Board Options Exchange Market Volatility Index (VIX) and the second-largest negative contribution was made by the expected inflation rate over next 10 years (BIR_10yr). Both indicators were also the two largest negative contributors in the previous week, but the size-ordering was reversed. Three of the 18 indicators contributed positively to the change in the STLFSI over the past week, two less than the previous week. The largest positive contribution was made by the TED spread—the difference between yields on three-month Treasury securities and three-month Eurodollars.
Over the past 52 weeks, 11 of the 18 indicators contributed negatively to the change in the STLFSI and seven indicators contributed positively to the index. For the 13th consecutive week, the largest negative contribution to the STLFSI over the past year was made by the spread between Baa-rated corporate bonds and 10-year U.S. Treasury securities (Corp_CRS). For the 32nd consecutive week, the largest positive contribution was accounted for by the BIR_10yr.
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.