Financial Stress Indicators

Financial Stress Level: Normal

VIX: 26.2 | HY Spread: 3.24% | SOFR: 3.62% | Yield Curve: 0.51%

Market Fear (VIX)

Elevated uncertainty (26.2). Above-average hedging demand. Market is nervous but not in full risk-off mode.

VIX Reference

• < 20: Normal volatility — markets comfortable
• 20–30: Elevated uncertainty — hedging demand rising
• > 30: High fear — significant risk repricing
• > 40: Extreme panic — forced deleveraging, liquidity stress

Credit Stress (High-Yield Bond Spread)

Normal (3.24%). Credit market not signaling acute stress.

The high-yield (HY) spread measures the premium investors demand to hold junk bonds over equivalent Treasuries. Wider spreads = more fear of corporate defaults = tighter financial conditions = slower economic growth.

HY Spread Reference

• 3–4%: Normal — credit markets open
• 4–6%: Elevated — companies paying up for debt
• >6%: Crisis territory — some borrowers effectively locked out
• 2008 peak: ~21% | 2020 COVID peak: ~10.8%

Yield Curve (10Y–2Y Treasury Spread)

Positive (0.51%). Normal slope, no inversion signal.

An inverted yield curve (negative spread) has preceded every US recession since 1955. The signal triggers when the curve inverts; the recession typically follows 6–18 months later. Re-steepening from inversion often means the recession has already begun.

Interbank Lending (SOFR)

Date	SOFR Rate
2026-03-20	3.6200%
2026-03-19	3.6200%
2026-03-19	3.6200%
2026-03-18	3.6200%
2026-03-18	3.6200%
2026-03-17	3.6500%
2026-03-17	3.6500%

Spikes in SOFR signal stress in short-term funding markets — banks tightening lending to each other. SOFR replaced LIBOR as the key dollar interbank benchmark in 2023.

Policy Rates

Central Bank	Rate	Context
Federal Reserve (Fed Funds)	3.64%	Key: hike = risk recession; hold = risk inflation
European Central Bank	3.65%	EUR fuel prices sensitive to ECB policy via EUR/USD

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Last updated: 2026-03-23 | Sources: FRED (Federal Reserve Bank of St. Louis), API Ninjas