ECONOMIC REPORT OF THE PRESIDENT

Index
6
Figure 2-36
Financial Conditions Indices, 2000–2016
5
4
3
2
1
0
St. Louis
Financial Stress
Index
Above Average
Tightness/Stress
-1
-2
Chicago Fed National
Financial Conditions Index
Below Average
Tightness/Stress
-3
2000 2002 2004 2006 2008 2010 2012 2014 2016
Source: Federal Reserve Bank of St. Louis; Federal Reserve Bank of Chicago.
Nov-2016
income gains—6.1 percent for Hispanic households, 4.1 percent for African-
American households, 3.7 percent for Asian households, and 4.4 percent for
non-Hispanic White households.
Financial Markets
U.S. financial markets have been robust so far in 2016, with equity
indexes higher, government bond yields slightly higher, credit spreads lower,
and oil prices rallying from lows that were touched in January. Equity markets
had been broadly down in late 2015. The level of the S&P 500 Index as
of November 30 is up 3.2 percent relative to the high reached in mid-2015.
Asset prices in 2016 tended to be broadly affected by central bank policy
decisions and investor perceptions of domestic and global growth prospects.
Financial markets were volatile and equity markets were down early in the
year, but have since recovered. In general, investor sentiment has been cautiously
optimistic and, as shown in Figure 2-36, financial conditions have
been relatively loose. Both rising asset prices and eased financial conditions
should continue to support the economic recovery.
The Year in Review and the Years Ahead | 125