The St. Louis Fed’s Financial Stress Index fell 0.495 point to 0.120 in the week ended May 22, its lowest since -0.587 in the February 21 week. The index is nearing the neutral mark of 0 (zero) that would suggest that markets are functioning more normally. It doesn’t change that the economy is in recession but it does suggest that credit markets are recovering. If these still need an assist from central bank liquidity programs, the demand could be easing.
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