Credit and Financial Stress
36cool
Now −2.09 | Data for Oct 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
A financial stress index built from 33 market variables by the US Treasury’s Office of Financial Research. Zero is average. Its volatility component is also shown.
When stress rises, prices of many kinds of assets often fall together. The volatility component combines volatility in stock, credit, currency and commodity markets.
Public substituteWe use this in place of “US stock volatility index (VIX)”. The VIX is derived from S&P 500 option prices and reflects the volatility of US stocks expected over the next 30 days; the volatility component of the OFR Financial Stress Index combines expected and realized volatility in stock, credit, currency and commodity markets. Both measure how much markets are swinging, but their scope and numbers differ. They measure similar things, but they are not the same number.
0 = average stress; higher = more stress.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also cool
Short sample: positions start only in 2009 (less than 30 years), so conclusions should be more cautious.
| Components | Percentile | Level | Data month |
|---|---|---|---|
| Volatility component | 60 | neutral | Oct 2026 |
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every cool month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened nextSample too small to draw conclusions (past cool months: 64; market episodes: 2).
Has hot or cold lined up with later returns?
2009–2021: average yearly change in US stocks over the next 5 years
In this period, the hotter the month, the higher the average over the next 5 years. The months overlap, so there are really only a few market episodes. This is a tendency, not a rule, and not a forecast.
What it is linked to
OFR stresstoWorld stocksCommon explanation: Ripple · opposite direction
When financial stress and volatility jump, funds that control risk by volatility lower their stock holdings at the same time, putting pressure on stock markets
This issue: OFR stress at 36 (cool), World stocks at 72 (warm) — OFR stress below normal, World stocks above normal, in line with the common explanation (this is an inverse link).
Supported by the dataAgreement +0.50 · in step in 12 of 12 5-year periods
OFR stress and Financial stress are often linked: both measure stress in financial markets, so the same shock makes both jump. They share a common source, so we do not draw a link between them.
Values
Data and sources