A buoyant stock market and confidence in the prospect of a rate cut out of the Federal Reserve helped further relax any indication that markets were experiencing stress. The St. Louis Fed’s Financial Stress Index fell to -1.377 in the July 5 week, the lowest since -1.382 in the January 26, 2018 week.
The causes for concern about an economic downturn have not gone away, but optimism about getting a so-called “insurance” cut in rates out of the central bank suggested that markets are less worried that it is not listening to what is going on.
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