As investors await the results of Europe’s stress tests, a measure of U.S. financial stress is slipping.
The St. Louis Fed’s financial stress index dropped for the second straight week last week. The index measures the level of several interest rates, the size of spreads between various market indicators and a few other variables such as volatility.
A spike last month spurred by questions about the value of European sovereign debt took the index to its highest level since last October, though it remained well below its 2008 peak. But it has declined in three of the four weeks since.