Financial Market Stress Down for Fourth Week out of Past Five

The St. Louis Fed Financial Stress Index (STLFSI) fell for the fourth week in the past five weeks. For the week ending May 9, 2014, the STLFSI measured -1.185, down slightly from the previous week’s revised value of -1.180.

Over the past week, seven of the 18 indicators contributed positively to the weekly change in the STLFSI, one fewer than the previous week. The largest positive contribution was made by the yield spread between corporate Baa-rated bonds and 10-year Treasury securities (Corp_CRS), followed closely by the yield spread between 3-month commercial paper and 3-month Treasury bills (CPS_3mo). Six of the 18 indicators contributed negatively to the weekly change, also one fewer than the previous week. The largest negative contribution was accounted for by the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo).

The STLFSI was about unchanged from its value a year earlier (-1.188) for the second consecutive week. Over the past 52 weeks, 10 of the 18 indicators contributed positively to the change in the STLFSI and eight indicators contributed negatively to the index. The largest positive contribution to the STLFSI over the past year was made by the expected inflation rate over next 10 years (BIR_10yr). The largest negative contribution was made by the Corp_CRS.