The U.S. economic condition declined to the tightest level in almost 10 months after the recent volatility following the rise in bond yields and concerns of accelerated Fed rate hikes, based on the index published by the Chicago Federal Reserve on Wednesday. National Financial Conditions Index of Chicago adjusted to -0.77 for the week up to March 2, which was last achieved 10 months ago. The index was -0.78 in the previous week. The negative outlook implies loose financial conditions but a positive outcome would mean tighter than usual conditions. In general, the financial outlook is still loose, which props up economic growth. However, the previous monetary tightening since late last year amid the increasing interest rates and market volatility, according to the analysts. The index used as reference includes three units the calculates leverage, credit conditions, volatility, and funding risk in the financial sector.
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