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The St. Louis Fed Financial Stress Index (STLFSI) rose slightly for the second consecutive week. For the week ending July 11, 2014, the STLFSI measured -1.350, up from the previous week’s revised value of -1.359. Year-to-date, the STLFSI has averaged -1.218, moderately lower than the -1.096 average that prevailed over the same year-to-date interval in 2013.
Over the past week, nine of the 18 indicators contributed negatively to the weekly change in the STLFSI, which was seven more than the previous week. The largest negative contribution was made by the expected inflation rate over the next 10 years (BIR_10yr). Six indicators contributed positively to the change in the STLFSI over the past week, four fewer than the previous week. The largest positive contribution was made by the Chicago Board Options Exchange Market Volatility Index (VIX).
Over the past 52 weeks, 17 of the 18 indicators contributed negatively to the change in the STLFSI and one indicator was unchanged. The largest negative contribution over the past year was made by the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo), followed by the yield spread between Baa-rated corporate bonds and 10-year Treasury securities (Corp_CRS). The STLFSI was below its year-earlier level for the ninth consecutive week.
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.