Financial Conditions Index Tracks the overall “level of Financial stress in the U.S.money,Bond and Equity markets to help assess the availability and cost of credit in Markets per Bloomberg. This is A metric that Fed officials Monitor and frequently mention in speeches as a way to measure stress in Economy and thus a metric they use to adjust rates,Lets see where it stands on weekly chart today vs. great financial Crisis. Conditions are poor but no where near as ugly as they were 10+ years ago,but current crisis is not over yet is it?
I believe one problem that is getting some mention but not enough is Credit spreads The “just above “Investment grade Companies were hanging on by a thread in Good times aka last few months, what will happen to them if A recession hits or at a minimum disruption in supply chain causes hiccups in production? they likely go Bust. This is where some Fiscal stimulus will show up in the form of tax relief ,short term delay on loan payments,or some other creative measure to keep business running during this slowdown. Below is the benchmark credit spread made up of 125 Credit default swaps spread across 6 sectors.Recall the higher the spread the more panic in Credit markets