St. Louis Financial Stress and Chicago Financial Conditions Index.
figure 1: St. Louis Fed Financial Stress Index, v. 4.0 (blue, left scale), Chicago National Financial Conditions Index (red, right scale). “STLFSI4 measures the level of financial stress in the market and is made up of 18 weekly data series: seven interest rate series, six yield spreads, and five other indicators. Each of these variables reflects some aspect of financial stress. As a result, the data series may move together as the level of financial stress in the economy changes.” “Chicago Fed’s National Financial Conditions Index (NFCI) comprehensive weekly update on U.S. money markets, debt and equity markets, and traditional and “shadow “Financial conditions in the banking system. A positive value for the NFCI indicates tighter than average financial conditions, while a negative value indicates easier than average financial conditions.” Sources: St. Louis Fed and Chicago Fed, via FRED.
It’s hard to see exactly what that means without comparison to recent periods of extreme financial turmoil. The picture below is a picture with a larger data span.
figure 2: St. Louis Fed Financial Stress Index, v. 4.0 (blue, left scale), Chicago National Financial Conditions Index (red, right scale). Sources: St. Louis Fed and Chicago Fed, via FRED.
Thus, while financial stress, as measured in both ways, has risen relative to recent history, it is still not close to the levels recorded during the pandemic or the global financial crisis.
