The St. Louis Fed’s Financial Stress Index improved for a third week in a row, reaching -0.907 in the January 18 week, its lowest level since -0.915 in the November 16, 2018 week. In spite of the partial shutdown of the federal government, strains in financial markets continue to ease. The near-term peak of -0.507 in the December 28 week was not indicative of a substantive deterioration in overall financial conditions, but did reflect the plunge in equity markets that has since stabilized.
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