The St. Louis Fed’s Financial Stress Index for the week ended February 15 continued its retreat from the modestly higher readings in late December and fell to -1.126, the lowest since -1.253 in the October 5, 2018 week. With the threat of another government shutdown averted and prospects of any impact from President Trump’s emergency declaration to build a US-Mexico border likely to take some time to manifest in the face of significant legal challenges, financial conditions eased further. In addition, it was even clearer that the consensus among Fed policymakers had shifted to waiting some time before imposing another rate hike in spite of the strength in the labor market with upward inflation pressures tame.
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