Formula & Calculation Mechanism
Weighted average of 105 financial market indicators across money, debt, and equity markets
Negative values indicate loose financial conditions (supporting equities); positive values indicate tight conditions.
Market Impact on US Equities & S&P 500
Loose conditions (NFCI < -0.40) support equity rallies and credit spread narrowing.
Historical Precedents & Bull/Bear Regimes
Spiked above +1.0 during 2008 financial crisis and March 2020 pandemic onset.