Chicago Fed Financial Conditions (NFCI)
Ease of borrowing. Credit.
Updated
What is it?
Measures how easy or hard it is to get financing in the US. Negative is easy; positive is hard.
Chicago Fed National Financial Conditions Index (105 series). Positive means tighter conditions than average.
Why does it matter?
When money is harder to get, companies invest and hire less.
When should it be a concern?
It is a concern when getting financing is harder than normal. Crisis Monitor turns each reading into a score from 0 to 100 using these bands:
| Situation | Value | What does it mean? |
|---|---|---|
| Calm | ≤ -0.60 | Score 0: no stress |
| Watch | ≥ -0.30 | Score 33: starts to draw attention |
| Stress | ≥ 0.00 | Score 66: risk zone |
| Extreme | ≥ 1.00 | Score 100: like in the worst crises |
Between one band and the next, the score is interpolated.
Financial conditions (Chicago) in past crises
Since January 1990, its weekly low was -1.10 (Aug 1993) and its high was 3.08 (Dec 2008). The typical level (the median) is -0.52.
| Crisis | At the start | High during the crisis |
|---|---|---|
| 1990-91 recession | -0.15 | 0.52 (Jan 1991) |
| Russia and LTCM 1998 | -0.55 | -0.03 (Oct 1998) |
| Dot-com bubble and 2001 recession | -0.17 | 0.03 (Jun 2000) |
| Global Financial Crisis 2007-09 | 0.08 | 3.08 (Dec 2008) |
| European debt crisis 2011 | -0.59 | -0.03 (Sep 2011) |
| 2015-16 market scare | -0.54 | -0.30 (Feb 2016) |
| Q4 2018 sell-off | -0.60 | -0.43 (Dec 2018) |
| COVID panic 2020 | -0.59 | 0.31 (Apr 2020) |
| 2022 bear market | -0.55 | -0.10 (Oct 2022) |
Weekly data. Crises that do not appear predate the series.
How does Crisis Monitor use it?
- Area: Credit and financial conditions (30% of the index). Whether companies and banks find it hard to borrow. When credit dries up, the trouble starts.
- When does it move? Usually warns early.
- Data frequency: weekly.
- Quick alarm: No.
The index combines 17 indicators. See the methodology to learn how it is calculated.
Data source
FRED, Federal Reserve Bank of St. Louis (NFCI). Data may arrive late and does not constitute financial advice.
Frequently asked questions
What does a positive NFCI mean?
That getting financing in the US is harder than normal. A negative value indicates easier conditions than the historical average.
Why does it matter for the economy?
When money is harder to get, companies invest and hire less. Financial conditions tend to tighten before activity slows.