The St. Louis Fed’s Financial Stress Index edged 0.036 point higher to 0.253 in the week ended June 26 after rising to 0.217 in the prior week. These aren’t readings consistent with same level of stress seen in the early days of the pandemic, but reports of rising infection rates and the return of more stringent social distancing orders have heightened stresses somewhat. The visibility of central banks and their responsiveness to any hint of less smooth functioning in financial markets should keep the tension from escalating.
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