The St. Louis Fed Financial Stress Index fell to -1.312 in the week ended Friday, September 13, but that was before the attack on Saudi Arabian oil production on September 14 and the Fed being forced to do repurchase operations on September 17 and 18 to address a cash crunch and act to maintain the fed funds rate within its then-range of 2.00%-2.25%. Although the index won’t suddenly signal that stresses are urgent for financial markets in the week ended September 20, it will likely reflect the significance of events even with the Fed acting as expected with a rate cut on September 18.
In the data as of September 13, there were signs that the inversion of the 2-year/10-year Treasury yields was easing further for a second week and the spread between the two yields was the largest in several weeks. The spread between the 3-month/10-year Treasurys yields was less negative than since early August.
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