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The St. Louis Fed Financial Stress Index (STLFSI) rose modestly in the latest reporting week. For the week ending Aug. 1, 2014, the STLFSI measured -1.282, an increase from the previous week’s revised value of -1.347. Last week’s increase was the fourth in the past five weeks and the largest since the week ending Jan. 31, 2014.
Over the past week, 13 of the 18 indicators contributed positively to the weekly change in the STLFSI, which was nine more than the previous week. The largest positive contribution was made by the Chicago Board Options Exchange Market Volatility Index (VIX), followed by the spread between high-yield corporate bonds and 10-year Treasury securities (HighYield_CRS). Only one of the 18 indicators contributed negatively to the change in the STLFSI over the past week, 10 fewer than the previous week. The sole negative contribution over the past week was made by the expected average inflation rate over the next 10 years (BIR_10yr).
Measured from a year earlier, the STLFSI has declined from -0.944 to -1.282. Over this period, 14 of the 18 indicators contributed negatively to the change in the STLFSI and three indicators contributed positively. For the 10th consecutive week, the largest negative contribution over the past year was made by the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo). The largest positive contribution over the past year was made by the VIX.
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.