Zhanna Hapanovich
These are aspects the Fed is considering in setting its monetary policy; that type of discussion is part of its meeting minutes.
Despite the turmoil in the stock market that has been zigzagging down from dizzying and
Despite Turmoil In Stocks, Financial Stress, Junk Bond Spreads Still In La-La Land Or Barely Exiting
Summary
- Overall financial conditions in money markets, debt markets, and equity markets, according to the Chicago Fed’s National Financial Conditions Index, have tightened from ultra-loose at the end of January to still very loose in the most recent week.
- The St. Louis Fed Financial Stress Index rose to +0.55, about where it had been in mid-2022 and below March 2023, and far below any periods of real financial stress.
- The ICE BofA BB US High Yield Index Option-Adjusted Spread had widened to 3.06 percentage points by April 7, but has since then narrowed to 2.70 percentage points.
- While the extra interest demanded by investors to take on additional credit risk is no longer at record lows as it was in January, it’s not even back to the range that prevailed over the majority of the time over the past 28 years.
Wolf Richter is the analyst at, and the publisher of, WOLF STREET, where he discusses business, finance, and money. Core focus: Federal Reserve, credits, equities, residential and commercial real estate, the auto industry, trade, consumers, and energy. He started this operation in 2011. Prior to that, he worked for 20 years in C-level positions, including 10 years in the auto industry. MBA from the University of Texas at Austin.