Something is coming up.
Again.
Thanks to Goldman to help us here:
"The recent tightening in financial conditions poses an obvious downside risk to our economic outlook. For example, since early January our Goldman Sachs Financial Conditions Index (GSFCISM) has risen nearly 2½ index points, due largely to the selloff in equities with dollar appreciation and long-term yield increases playing supporting roles. This essentially returns the GSFCISM to its highs of last autumn, indicating extreme tightness in financial conditions. It is difficult to lay out precisely the developments we need to see in financial markets to accompany the anticipated improvement in economic activity, especially given that the index has not captured some key aspects of the current crisis—specifically, the differential effect of tightening in the mortgage market and the seize-up in other markets. Suffice it to say that if financial conditions do not ease materially in coming months we would distrust the stabilization story even if we saw most of the mileposts on the road map."
Sphere: Related Content
Again.
Thanks to Goldman to help us here:
"The recent tightening in financial conditions poses an obvious downside risk to our economic outlook. For example, since early January our Goldman Sachs Financial Conditions Index (GSFCISM) has risen nearly 2½ index points, due largely to the selloff in equities with dollar appreciation and long-term yield increases playing supporting roles. This essentially returns the GSFCISM to its highs of last autumn, indicating extreme tightness in financial conditions. It is difficult to lay out precisely the developments we need to see in financial markets to accompany the anticipated improvement in economic activity, especially given that the index has not captured some key aspects of the current crisis—specifically, the differential effect of tightening in the mortgage market and the seize-up in other markets. Suffice it to say that if financial conditions do not ease materially in coming months we would distrust the stabilization story even if we saw most of the mileposts on the road map."
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