How tight or loose is the financial system right now
One composed read on US and cross-country conditions: a transparent Financial Conditions Index against its own history, the Treasury yield curve and its inversions, the Basel III credit-to-GDP gap and credit impulse, the daily global stress indices (the U.S. Treasury OFR FSI and the ECB CISS), and the official Fed stress indices. Everything is built on open primary sources (FRED, BIS, the OFR, the ECB), with every series traceable to source. These are historical descriptive measures, not investment advice.
-0.68
FinObservatory FCI
Loose, 33rd pctl since 1991
+0.51 pp
10y-2y Treasury slope
positive, Aug 14, 2026
-0.55
Chicago Fed NFCI
official, loose, Aug 7, 2026
-11.5 pp
US credit-to-GDP gap
Basel III: normal, 2025Q4
Data as of Mar 31, 2026 (FinObservatory FCI)
What this is. The FinObservatory FCI is a transparent 8-component, quarterly composite (higher = tighter), not a replica of the Chicago Fed NFCI, which aggregates 105 weekly indicators and is carried here as the official benchmark. It agrees with the NFCI at the 2008 extreme, and financial conditions are not the monetary-policy stance. Where a precise read is needed, the official NFCI and STLFSI4 (below) are the authority. See the methodology for every component, window, citation, and limitation.
Financial conditions
Financial conditions are loose at the 33rd percentile
Quarterly US composite in standard deviations, 1991–2026. A PCA-weighted z-score of eight credit, curve, survey and market indicators, standardized to mean 0 and standard deviation 1, higher = tighter. The latest reading is -0.68 (Mar 31, 2026), looser than about 67% of all quarters. Its one extreme tight regime is the 2008–2011 global financial crisis. Shaded bands are NBER recessions.
The eight component z-scores at the latest quarter (positive = pushing conditions tighter, negative = looser). Low credit spreads and low mortgage delinquencies are the main loosening forces.
Component
z-score
Pushing
term_spread_10y3m
+0.75
tighter
term_spread_10y2y
+0.44
tighter
fed_funds
+0.41
tighter
vix
+0.15
tighter
real_credit_growth
+0.06
tighter
sloos_ci_tightening
-0.02
looser
delinq_all
-0.65
looser
baa_aaa_spread
-0.83
looser
Scroll horizontally to view the full table
Source:FinObservatory macro engine (absorbed from argus), driven unmodified | FRED, Federal Reserve Bank of St. Louis Component z-scores over the full 1991Q1-2026Q1 sample; three components sign-inverted so higher always = tighter. Methodology
The Treasury yield curve
The Treasury curve is positive again as of Aug 13, 2026
The current curve of constant-maturity Treasury yields (as of Aug 13, 2026), and the 10-year-minus-2-year slope back to 1976, in percent and percentage points. The slope is currently +0.51 pp (positive).
Scroll horizontally to view the full chart
Hover a node for the exact yield
Daily constant-maturity Treasury rates (DGS series), latest observation per tenor.
Every recession in this sample followed a yield-curve inversion
Daily US 10-year-minus-2-year Treasury slope in percentage points, 1976–present. The slope went negative at some point in the 2 years before 6 of the 6 NBER recessions in the sample.
10y-2y slope (pp) · hover for values; dashed line = zero; red = inverted
FRED T10Y2Y, daily; gray bands are NBER recessions (FRED USREC). Red = inverted (10y below 2y); inversion computed from the data, not fixed dates. The lead count above tests each recession against the full daily series for any negative print in the prior 2 years. Chart plots each window's extreme daily prints: every point is a real observation, spikes preserved.
US private credit remains far below its long-run trend
The credit-to-GDP gap is the deviation of private non-financial credit from its long-run trend, the Basel III anchor for the countercyclical capital buffer. The credit impulse is the acceleration of that credit, which tends to lead GDP. The US gap is currently -11.5 pp (normal), far below trend after the post-2008 and post-2020 deleveraging.
The credit impulse plunged during the 2008 deleveraging
Quarterly US credit acceleration in percentage points over the full BIS history, measured as the quarter-over-quarter 2nd difference of the broad credit-to-GDP ratio.
Credit-to-GDP gap across major economies, latest quarter
Where each of the nine BIS-covered major economies sits against its own long-run credit trend. Only Japan is currently above the Basel III watch threshold; the rest are all well below trend.
Economy
Gap (pp)
Basel III signal
As of
JPNJapan
+6.8
ELEVATED
2025Q4
DEUGermany
-4.0
NORMAL
2025Q4
CHNChina
-7.7
NORMAL
2025Q4
KORSouth Korea
-8.0
NORMAL
2025Q4
AUSAustralia
-9.9
NORMAL
2025Q4
USAUnited States
-11.5
NORMAL
2025Q4
FRAFrance
-15.1
NORMAL
2025Q4
CANCanada
-15.3
NORMAL
2025Q4
GBRUnited Kingdom
-17.8
NORMAL
2025Q4
Source:FinObservatory macro engine (absorbed from argus), driven unmodified | BIS credit statistics Engine gap (== BIS published gap) on the BIS private-non-financial-sector credit-to-GDP ratio. Bangladesh is absent from BIS's ~43-economy set. Methodology
$115.6T
Total credit, all sectors
TCMDO, Z.1 | 2026Q1
$21.1T
Household debt
CMDEBT, Z.1 | 2026Q1
$14.5T
Nonfinancial corporate debt
BCNSDODNS, Z.1 | 2026Q1
+16.1
C&I demand, large firms
DRSDCILM, net % of banks | 2026Q3
The US credit cycle: loan demand, standards, and sectoral debt
Post-Lehman brought the sharpest tightening in the survey record
Quarterly US net percentages of banks, 1990–present. Two views of the same cycle. The Fed’s quarterly Senior Loan Officer Opinion Survey (SLOOS) reads the bank lending channel from both sides: loan demand (the net percentage of banks reporting stronger demand for commercial and industrial loans) against lending standards (the net percentage tightening them). The Z.1 Financial Accounts track the debt stock that cycle leaves behind, by sector, back to 1945. As of 2026Q3, large and middle-market C&I demand reads +16.1 (net % of banks); total US debt securities and loans outstanding stand at $115.6 trillion (2026Q1).
Demand and standards are distinct questions: banks reporting weaker demand tell you borrowers are pulling back; banks tightening standards tell you credit supply is. The sharpest net tightening of standards on record is +83.6 (2008Q4, the post-Lehman quarter); the weakest large-firm demand is -70.2 (2001Q4, the dot-com downturn). All values are net percentages of banks, not loan volumes. Shaded bands are NBER recessions.
Demand, large/mid firms DRSDCILMDemand, small firms DRSDCISStandards (net tightening) DRTSCILM
Quarterly. Demand series begin 1991Q4; the standards series (DRTSCILM, also an FCI component) reaches back to 1990Q2 and is read from the existing FRED spine, not duplicated.
The US credit cycle: loan demand, standards, and sectoral debt
Federal debt has risen past both private sectors
US Z.1 debt securities and loans outstanding by sector in nominal USD trillions, 1945–present. Household debt ($21.1T) plateaued relative to its pre-2008 trajectory after the GFC deleveraging; federal debt ($34.5T) has risen past both private sectors since 2008. Nominal levels, not deflated or scaled by GDP.
Federal government FGSDODNSHouseholds and nonprofits CMDEBTNonfinancial corporate BCNSDODNS
SCOOS: terms, leverage use, and demand for securities financing
The Federal Reserve’s quarterly Senior Credit Officer Opinion Survey (SCOOS) reports qualitative net percentages among applicable respondents. These are not financing volumes, market shares, interest rates, or borrower-level observations. The 2026Q2 panel separates terms extended to hedge funds, use of financial leverage, and demand for securities financing because their signs answer different questions.
For terms, positive is net tightening less easing. For leverage use and demand, positive is net increased less decreased. The survey covers major dealers that account for almost all dealer financing of dollar-denominated securities to nondealers and are active OTC-derivatives intermediaries. It does not represent every dealer or every hedge fund.
Terms extended to hedge funds
Positive means net tightening less easing. Each legend repeats the applicable direction.
Price terms extended to hedge funds (net tightening less easing) EXH_E1_C3.Q4.NPNonprice terms extended to hedge funds (net tightening less easing) EXH_E1_C5.Q5.NP
Positive means net increased use less decreased use. Each legend repeats the applicable direction.
Hedge-fund use of leverage (net increased use less decreased use) EXH_E2_C1.Q8.NPTrading-REIT use of leverage (net increased use less decreased use) EXH_E2_C2.Q15.NP
Money markets: SOFR, EFFR, and the FOMC target range
SOFR and EFFR are inside the Fed's target range
Daily US overnight rates in percent, 2016–present. These rates anchor the short end of the curve. SOFR, the Secured Overnight Financing Rate, is the volume-weighted median of overnight Treasury repo and is the successor benchmark to USD LIBOR; EFFR, the Effective Federal Funds Rate, is the volume-weighted median of overnight unsecured interbank lending and is the rate the FOMC steers into its target range. Latest SOFR is 3.62% and EFFR 3.63% (Aug 13, 2026), both inside the FOMC target range of 3.50–3.75%; the 30-day compounded SOFR average is 3.64%. These NY Fed reference rates are the canonical short-rate source here, superseding any single SOFR series carried on the FRED spine. These are the rates; the corresponding repo and money-fund volumes have their own page.
Both overnight rates sit inside the shaded target band in normal times. Three departures stand out: the September 17, 2019 repo spike, when a collateral-and-reserves squeeze drove SOFR to 5.25% (its 99th percentile hit 9.00%) far above the band; the March 2020 cut to the zero lower bound (target 0–0.25%); and the March 2023 SVB week. SOFR is secured and starts at its 2018 inception, so its line begins mid-chart.
SOFREFFRFOMC target range
Scroll horizontally to view the full chart
Hover for SOFR, EFFR and the target range; shaded band = FOMC target
Daily, NY Fed Markets Data API; SOFR/EFFR/SOFR-averages carried unaltered. FOMC target range published alongside EFFR. Chart plots each window's extreme daily prints: every point is a real observation, spikes preserved.
New York Fed reference-rate notice. “The SOFR, the EFFR, and the SOFR Averages are subject to the Terms of Use posted at newyorkfed.org. The New York Fed is not responsible for publication of these rates by FinObservatory, does not sanction or endorse any particular republication, and has no liability for your use.”
US monetary policy
The federal funds rate reached double digits under Volcker
Weekly US effective federal funds rate in percent, 1954–present, from the 1.13% first print in 1954 through the Volcker peak to today. The NY Fed’s own EFFR history starts Jul 3, 2000; earlier values (the gray segment) are the Board of Governors’ H.15 daily federal funds rate distributed via FRED (series DFF, source fred_dff_h15). Shown at weekly frequency (the last print of each week) so the uniform daily FRED segment and the business-day NY Fed segment share one honest time axis; the two colors are the two sources, not a break in the rate.
Federal funds rate, pre-2000 fred_dff_h15NY Fed EFFR, 2000+ nyfed_markets_api
Weekly (last print each week), 3,764 weeks. Pre-2000-07-03 segment is FRED DFF (H.15, 7-day daily); NY Fed EFFR (business days) thereafter. The splice was cross-checked: the two sources agree on every sampled overlap date.
Where does policy stand relative to neutral? The NY Fed's Holston-Laubach-Williams model puts the US natural
rate of interest, the real short rate consistent with full strength and stable inflation, at 1.06% in 2026Q1 (the original Laubach-Williams model reads 1.70%). The comparable
real policy rate, built here as the effective federal funds rate (FRED FEDFUNDS) averaged over the same
quarter minus 12-month core PCE inflation (FRED PCEPILFE) averaged over that quarter, is 0.50% (3.64% nominal less 3.14% inflation): -0.55 pp below the HLW natural rate on this construction.
1.06%
HLW r-star, US
one-sided | 2026Q1
1.70%
LW r-star, US
one-sided | 2026Q1
0.50%
Real policy rate
FEDFUNDS minus core PCE | 2026Q1
-0.55 pp
Gap vs HLW r-star
real rate below neutral
The natural rate of interest: r-star
US r-star has only partly recovered from its post-GFC low
Quarterly US natural-rate estimates in real percentage points, 1961–present.
HLW averaged 4.91% over 1961Q1–1969Q4, fell to a
post-2009 low of 0.56% in 2014Q1, and reads
1.06% in 2026Q1. Trend growth (HLW g, not charted) is
2.42% in 2026Q1, so the low r-star is carried by the model's negative
other-determinants component, not by growth.
Quarterly, one-sided (filtered) estimates, 261 quarters. The r* = c*g + z identity was re-derived on every row at build using the files' own parameters. The real-rate construction is FinObservatory's, stated above; HLW itself uses different inflation expectations.
Estimate uncertainty. These are filtered model estimates, not observations. The NY Fed's own parameter table puts the
sample-average standard error of the US HLW r-star at 1.18 pp, larger than the
2026Q1 estimate itself, and the page states: “The Laubach-Williams and Holston-Laubach-Williams estimates are not official forecasts of the Federal Reserve Bank of New York, its president, the Federal Reserve System, or the Federal Open Market Committee.”
Household inflation expectations
One-year inflation expectations remain above the three-year view
Monthly median US household inflation expectations in percent since 2013
(158 surveys). The Survey of Consumer Expectations asks a rotating panel of household heads where
inflation is going. In
July 2026 the median respondent expected 3.6% inflation over the next year (from 3.7% the month before) and 3.3% at the three-year horizon. Disagreement is wide: the middle half of one-year answers spans
2.2% to 6.0%. The one-year median peaked at
6.8% in June 2022, the post-pandemic inflation shock.
Household debt by product and its delinquency, from the New York Fed’s Consumer Credit Panel (an anonymized 5% sample of Equifax credit files). Total household debt stands at $18.79 trillion (2026Q1), of which mortgages are $13.19 trillion (70.2% of the total). The stress is concentrated in unsecured revolving credit: credit-card balances 90+ days delinquent have reached 13.12%, against just 1.09% on mortgages.
$18.79T
Total household debt
NY Fed CCP | 2026Q1
70.2%
Mortgage share
$13.19T of balances
13.12%
Credit-card 90+ delinquency
2026Q1
1.09%
Mortgage 90+ delinquency
2026Q1
Household debt
Mortgages dominate the US household balance sheet
Quarterly US debt balances outstanding by product in nominal USD trillions, 2003Q1–present. Mortgages dominate the balance sheet; the non-housing products (auto, student, credit card) are the smaller, faster-moving lines.
Credit cards and student loans carry the highest 90-day delinquency
Quarterly US 90-day delinquency by product in percent of balance, 2003Q1–present. A loan is counted after 90 or more days delinquent. Mortgages, cleaned out by post-2008 underwriting, sit near the floor; credit cards and student loans carry the highest delinquency.
The lender of last resort: the Federal Reserve discount window
Loan-level discount-window borrowing, aggregated by credit type. Primary credit is the standby facility for sound banks; secondary and seasonal credit are narrower programs. The dollar record and the participation record fall in different months. In 2023-03, primary credit originations reached $3.05T across 444 distinct borrowers. In 2020-03, primary credit reached a record 475 distinct borrowers and $89.11B of originations. These are loan originations summed over the month, a flow, not outstanding balances. Primary credit is dominated by overnight loans re-originated every business day, so the summed flow far exceeds the point-in-time stock: the Fed’s H.4.1 release shows primary credit outstanding peaking near $153 billion the week ending March 15, 2023. Over the full record (2010-07–2024-06), all credit types sum to $4.20T of originations. Aggregates only: no borrower is named.
$3.05T
Peak monthly originations
Primary Credit, 2023-03
475
Peak monthly participation
Primary Credit, 2020-03
$9.0M
Median loan at dollar peak
2023-03
~$153bn
H.4.1 outstanding peak
stock, week ending Mar 15, 2023
$4.20T
Total originations
2010-07–2024-06
Federal Reserve liquidity
The monthly dollar record came in 2023-03
US discount-window originations summed within each month in USD billions, 2010-07–2024-06. The 2023-03 primary credit spike reached $3.05T. Because overnight loans can be re-originated every business day, this monthly flow is not comparable with a point-in-time outstanding balance. Secondary and seasonal credit are small throughout; missing monthly rows break those lines rather than reading zero.
Aggregates only, never borrower names. Values are originations SUMMED over each month (a flow), not outstanding balances (a stock). Published on the ~2-year Dodd-Frank section 1103 lag, so coverage ends at 2024-06.
The participation record came in 2020-03, not the dollar-record month
Monthly distinct borrowers by credit type, 2010-07–2024-06. The record was 475 borrowers using primary credit in 2020-03, when originations totaled $89.11B. That participation peak is a different month from the 2023-03 dollar peak.
Distinct borrower counts are monthly aggregates, never borrower names. Missing credit-type rows are gaps, not zero borrowers. Published on the ~2-year Dodd-Frank section 1103 lag, so coverage ends at 2024-06.
US equity valuations rank at the 99th percentile since 1881
Monthly US cyclically adjusted price-to-earnings ratio from 1881–2026. CAPE (P/E10) is the real S&P Composite price divided by the ten-year average of real earnings, Robert Shiller’s standard gauge of how richly US equities are valued relative to their own long history. The latest available reading is 41.4 (July 2026), richer than about 99% of all months. Its all-time high is 44.2 (December 1999, the dot-com peak); its all-time low is 4.8 (December 1920). This is a descriptive valuation measure, not a market-timing signal or investment advice.
Monthly, 1881–2026-07. No explicit open-data license: freely downloadable research data, displayed here with citation to Shiller. The shipped vintage ends July 2026, so "latest" is the most recent published observation, not today.
For the other side of the global monetary picture, see how the world holds its reserves: reserve-currency composition.
Global financial stress
Two official daily stress indices that both span the 2008 and 2020 crises. The OFR Financial Stress Index is the U.S. Treasury Office of Financial Research’s market-based gauge, built as the sum of stress contributions from the United States, other advanced economies and emerging markets, and centered so zero is its long-run average. The ECB CISS is the European Central Bank’s composite indicator of systemic stress, bounded in [0, 1] and constructed to rise when several market segments are stressed at once. Both are official indices carried here unaltered, and both currently read well below their crisis levels.
Global financial stress
Market stress is calmer than 76% of trading days since 2000
Daily global financial-stress index in points, 2000–2026; higher means more stressed and zero is the long-run average. The latest reading is -2.74 (Aug 12, 2026), at the 24th percentile of its history. Its all-time peak is the October 2008 global financial crisis; the March 2020 COVID crash is the second spike. Shaded bands are NBER recessions.
OFR FSI (0 = long-run average) · hover for values; dashed line = zero
Daily, U.S. Treasury Office of Financial Research; public domain. Recession bands from the FRED USREC series. Chart plots each window's extreme daily prints: every point is a real observation, spikes preserved.
Latest regional stress contributions, Aug 12, 2026
-0.55
Emerging markets
subtracting stress
-0.82
Other advanced economies
subtracting stress
-1.37
United States
subtracting stress
OFR builds the composite as the sum of these three regional contributions, so they decompose the headline reading above (to rounding).
Global financial stress
Euro-area stress is at the 13th percentile since 1980
Daily euro-area composite indicator of systemic stress from 1980–2026, on an index bounded in [0, 1] (higher means more systemic stress). The latest reading is 0.009 (Aug 4, 2026). Three peaks stand out: the post-Lehman 2008 crisis (the series maximum), the 2011–2012 euro sovereign-debt crisis, and the March 2020 COVID shock.
CISS (0 to 1, higher = more stress) · hover for values; dashed line = zero
Daily, ECB Data Portal (dataset CISS); free with attribution. Method: Hollo, Kremer and Lo Duca (2012), ECB Working Paper 1426. Chart plots each window's extreme daily prints: every point is a real observation, spikes preserved.
Latest CISS by country version, most-stressed first
Area
CISS (0–1)
As of
BEBelgium
0.045
Aug 4, 2026
USUnited States
0.027
Aug 4, 2026
CNChina
0.020
Jul 31, 2026
ITItaly
0.016
Aug 4, 2026
DEGermany
0.015
Aug 4, 2026
IEIreland
0.011
Aug 4, 2026
U2Euro area
0.009
Aug 4, 2026
PTPortugal
0.009
Aug 4, 2026
GBUnited Kingdom
0.008
Aug 4, 2026
NLNetherlands
0.007
Aug 4, 2026
ATAustria
0.005
Aug 4, 2026
ESSpain
0.005
Aug 4, 2026
FRFrance
0.005
Aug 4, 2026
FIFinland
0.004
Aug 4, 2026
14 areas carry the daily CISS. Greece has no daily version (only a monthly sovereign sub-index) and is absent by construction, not omitted. China (CN) lags the others by a few days.
Global financial stress
Supply-chain pressure is at the 88th percentile since 1998
Monthly global supply-chain pressure in standard deviations from its 1998–present
average (that average is 0.01), across 343 observations since
1998; the GSCPI is a real-economy gauge, not a financial-stress index, and combines
transportation and manufacturing data across the major economies. The latest reading is +0.80 (July 2026), down from +1.19 the month
before. Pressure peaked at +4.44 in December 2021, the post-pandemic supply-chain crunch, and troughed at -1.59
in May 2023.
GSCPI (standard deviations from mean) · hover for values; dashed line = zero
The NY Fed page states: "We update the GSCPI at 10:00 a.m. on the fourth business day of each month." The data are ingested unaltered from the interactive-chart workbook, and recent months revise with each release. Attribution required by the NY Fed Terms of Use: "(c) 2026 Federal Reserve Bank of New York. Content from the New York Fed subject to the Terms of Use at newyorkfed.org."
These authoritative financial-stress gauges are each oriented so higher = more-stressed. They are the official indices from the Federal Reserve Banks of Chicago, St. Louis, and Kansas City (NFCI, STLFSI4, KCFSI), the U.S. Treasury (OFR FSI), and the European Central Bank (CISS), distinct from the FinObservatory FCI above (our own transparent, long-history composite, shown for contrast). Latest readings are shown in each publisher’s own units.
-0.55
Chicago Fed NFCI
Chicago Fed | Aug 7, 2026
-0.77
St. Louis Fed STLFSI4
St. Louis Fed | Aug 7, 2026
n/a
Kansas City Financial Stress Index
Federal Reserve Bank of Kansas City | Index, Not Seasonally Adjusted | awaiting refresh
7 stress indicators (all oriented so higher = more stressed, all covering both crises) at today’s reading, at their most-stressed reading during the 2007–2009 global financial crisis, and during the 2020 COVID crash.
Indicator
Today
GFC peak (2008)
COVID peak (2020)
FinObservatory FCI
index (sd)
Quarterly; the March-2020 spike averages out (a documented limitation), so its COVID column is near zero.
-0.68
Mar 31, 2026
2.53
Dec 31, 2008
0.13
Jun 30, 2020
Chicago Fed NFCI
index (sd)
-0.55
Aug 7, 2026
3.10
Nov 28, 2008
0.31
Apr 3, 2020
St. Louis Fed Financial Stress Index
index (sd)
-0.77
Aug 7, 2026
9.68
Oct 10, 2008
5.66
Mar 20, 2020
OFR Financial Stress Index
index (0 = long-run average)
Daily, US Treasury OFR; sum of regional stress contributions.
-2.74
Aug 12, 2026
29.32
Oct 10, 2008
10.27
Mar 19, 2020
ECB CISS, euro area
index (0 to 1)
Daily, ECB; systemic-stress composite bounded in [0, 1].
See the full methodology for the FCI component set and PCA construction, the Basel III one-sided-HP credit gap, the credit-impulse definition, the curated panel, the NFCI validation, and every stated limitation.