For the week ending Oct. 3, 2014, the St. Louis Fed Financial Stress Index (STLFSI) measured -1.087. The index rose for the fifth consecutive week and is at its highest level since the week ending Dec. 6, 2013.
Over the past week, eight of the 18 indicators contributed positively to the change in the STLFSI, and seven indicators contributed negatively to the change in the STLFSI. The STLFSI’s bond and equity market volatility components—the Chicago Board Options Exchange Market Volatility Index (VIX) and the Merrill Lynch Bond Market Volatility Index (Mlynch_BMVI_1mo)—made the two largest positive contributions over the past week. The next-largest positive contribution was made by the market-based measure of inflation expectations over the next 10 years (BIR_10yr). The two largest negative contributions were made by the yield on corporate Baa-rated bonds (BAA) and the TED spread (the difference between yields on three-month Treasury bills and Eurodollars).
Over the past year, 13 of the 18 indicators contributed negatively to the change in the STLFSI, which is one more than the previous week. For the 19th consecutive week, the largest negative contribution was made by the Mlynch_BMVI_1mo. Four of the 18 indicators made a positive contribution to the STLFSI over the past year, with the largest positive contribution coming from the BIR_10yr.
For an explanation of the 18 component variables in the STLFSI, refer to the STLFSI Key.