The St. Louis Fed Financial Stress Index (STLFSI) rose modestly over the past week, more than offsetting the previous week’s decline. For the week ending Sept. 5, 2014, the STLFSI measured -1.284, up from the previous week’s revised value of -1.326 and the first increase in the past four weeks.
Over the past week, 11 of the 18 indicators contributed positively to the change in the STLFSI, eight more than the previous week. The largest positive contribution was made by the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo), followed by the Chicago Board Options Exchange Market Volatility Index (VIX). Four of the 18 indicators contributed negatively to the change in the STLFSI over the past week, seven fewer than the previous week. The largest negative contribution was made by the market-based measure of inflation expectations over the next 10 years (BIR_10yr).
Over the past year, 15 of the 18 indicators contributed negatively to the change in the STLFSI and no indicators contributed positively. For the 15th consecutive week, the largest negative contribution over the past year was made by the Mlynch_BMVI_1mo. The yield on Baa-rated corporate bonds (BAA) made the second-largest negative contribution.
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.