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On the radar: St. Louis Fed’s Financial Stress Index continues to ease

The St. Louis Fed’s Financial Stress Index for the week ended February 1 showed stress continued to retreat over the course of January. The unadjusted index is now at -0.991, its lowest reading since -0.993 in the November 9, 2018 week.

Markets are now reassured that the FOMC will delay on further removal of interest rate accommodation. Equity markets have regained some of the ground lost late in 2018. There are still significant uncertainties ahead for the US economy in light of a sluggish performance for the global economy and unknowns for domestic fiscal policy. Nonetheless, fears about a possible recession resulting from tighter monetary policy have retreated. If growth is off the faster pace of 2018, it is consistent with continued moderate expansion.

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