are easy, with the index tracking US systemic stress at -0.49
have turned tighter vs the previous week's average
Markets are functioning normally.
IntroFinancial conditions refer to a mix of financial factors that collectively paint a picture of the availability and cost of credit, overall market stress and its subsequent impact on economic growth. Main factors include interest rates, credit spreads, market volatility, the exchange rate and stock prices.
In the US, financial conditions are measured via the FED composite systemk of systemic stress, shown in the chart.
Financial conditions & the economyChanges in each of the above components in isolation influence the economy in different ways. In general, a stronger USD acts to restrain growth via reduced demand for exports. Higher corporate bond spreads restrain lending growth and corporate investment. Lower equity prices suppress growth in consumer spending through the wealth effect, and finally the overall level of interest rates is a key component of mortgage rates and corporate borrowing rates. It is through this lens of financial conditions, broadly defined, that we should interpret the effects of the current FED policy.
Monetary policy influence on financial conditionsWhen the FED raises the short interest rate, the aim is to increase the cost of borrowing and spending and thus suppress latent inflation pressures. Tighter financial conditions are the transmission mechanism through which this occurs. Interest rates have a cascading effect on the other factors mentioned above, such as stock prices or credit spreads.
Chart guideFinancial conditions in the US (or the composite index of systemic stress) are easy, or easier when floating below 0.2, and tight, or tighter when floating above. When systemic stress raises, it could mean that stock markets are in tensions, and/or corporate bond spreads are raising to challenging levels, or the USD turns too expensive to make exports flow. Viceversa, lower stress, or easier financial conditions, translate into a happy stock market, lower spreads, cheaper USD etc.
US VIX
CBOE Volatility Index
a measure of market fear in the US
how's the US stock market volatility?
Latest data: 23-03-2026
Equity volatility in US:
is turning higher today, with the index at 24.91
has turned higher vs the previous week's average
The situation is tense and equity investors are nervous.
IntroThe US VIX index measures volatility expectations in the Euro Stoxx 50 index and it is an essential gauge of market fear in Europe.
In more detail, the index tracks real-time options prices on the Euro Stoxx 50 index, thus reflecting market expectations of future volatility – also known as implied volatility – in Eurozone stocks.
What is volatilityIn general terms, equity volatility is a measurement of how varied the returns of stocks (Eurozone stocks here specifically) are over time. Volatility is often associated with big price swings, either up or down. Volatile assets are often considered riskier than less volatile assets because the price is expected to be less predictable.
Volatility & marketsVolatility is a solid sentiment indicator with three unique behavioral characteristics: its tends to revert to the mean; is negatively correlated with its underlying asset (European stocks here) and to cluster in specific regimes.
Chart guideWe look at the daily volatility of the main European stock index, which looks at the biggest and most representative companies in Europe. Higher volatility here indicates rising tensions for equity investors, usually leading to lower returns in the short term. Lower volatility indicates lower, fading or no tensions among investors, a situation that usually leads to higher returns over time.