The St. Louis Fed introduced the 2.0 version of its Financial Stress Index on March 26. This replaced the prior version which is now discontinued. A reading of 0 (zero) is for normal conditions.
In the week ended March 20, the index reading was 5.787, up 2.358 points from 3.429 in the prior week. Index readings have climbed for the past five weeks and the index has been above 0 for four weeks in a row. The index has not been this high since 5.970 in the week ended December 12, 2008 at the tail end of the financial crisis. There hasn’t been this sharp a week-to-week rise since up 2.362 points in the week ended October 3, 2008.
It may take some weeks for markets to settle as they digest actions from central banks around the globe that flooded markets with liquidity and reduced borrowing costs.
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