The degree of financial stress in the markets, as represented by St. Louis Fed’s Financial Stress Index, eased to -1.377 in the week ended July 5 – its fourth straight weekly decline.
The latest weekly reading is the lowest level in 17 months.
The financial stress continues to drop expectations running high that the US Federal Reserve will begin easing cycle with a 25 basis point rate cut on July 31. The market expects the central bank to deliver at least one more rate cut before the year end.
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