Dollar funding stress describes a deterioration in the price or availability of dollar financing. It may appear in secured funding rates, policy-rate spreads, corporate credit spreads, broad financial conditions and the foreign-exchange value of the dollar.

FLI direction-adjusts these stress measures so that a positive score consistently means relatively easier funding conditions. This makes the signal easier to compare with QLI and avoids mixing economic directions inside one chart.

No single spread is a universal alarm. Funding conditions can tighten unevenly across banks, dealers, companies and offshore borrowers, so the composite should be interpreted alongside its components.

MACRO TRADER LENS

How a macro trader can use this research

Funding stress is most useful as an early defensive filter. The signal is stronger when secured funding, credit and the dollar deteriorate together—not when one spread moves around a reporting date.

01 · MONITOR

Watch the tail, not only the mean

Track SOFR–IORB, SOFR's upper-tail distribution, credit spreads, broad financial conditions, the dollar and usage of standing or emergency facilities.

02 · TRADE USE

Adjust fragility exposure

Use a broad deterioration to reduce dependence on leverage and liquidity, test curve or basis relative value and distinguish funding-sensitive assets from fundamentally defensive ones.

03 · CONFIRM

Require breadth and persistence

A warning deserves more weight when tail rates, facility usage, credit spreads and the dollar confirm it for more than a single session.

04 · INVALIDATE

Filter calendar noise

Quarter-end, tax dates and dealer balance-sheet windows can create technical jumps. A rapid mean reversion without credit or facility confirmation weakens the stress thesis.

Built from traceable sources

Federal Reserve and FRED series, New York Fed funding data, U.S. Treasury cash balances and cross-asset market prices.

Research information only — not investment advice.

Dollar Funding Stress