4 Fin. Stress Indexes Stable - No Cause for Concern

The nearby charts show four Federal Reserve Bank measures of financial stress and economic conditions, from the top are: 1) Kansas City Financial Stress Index, b) National Financial Conditions Index (Chicago Fed), c) St. Louis Financial Stress Index, and d) Aruoba-Diebold-Scotti Business Conditions Index (Philadelphia Fed, measures overall business conditions).  Each of these four index measures of financial stress/economic conditions are at pre-recession, 2007 levels, and none are showing any indications of evelated risk or stress in U.S. financial markets or the economy with data through July 2011.  While there have certainly been signs of moderating economic growth lately, and some reasons for concern, the underlying conditions in the financial markets remain stable and this would weaken the case for a pending double-dip recession.