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The evolution of financial conditions in the euro area and the United States: a Macro-Finance FCI perspective

Author

Listed:
  • Bletzinger, Tilman
  • Martorana, Giulia
  • Mistak, Jakub

Abstract

This box extends the Macro-Finance Financial Conditions Index (FCI) framework, originally developed for the euro area, to the United States. The analysis finds close linkages between US and euro area financial conditions, with risk assets playing a dominant role in the transmission of US shocks to euro area financial markets. In particular, changes in market expectations for the stance of US monetary policy affect euro area financial conditions through global risk-asset repricing, even when the ECB’s own policy stance remains unchanged. The findings highlight the importance of spillovers from the United States in shaping euro area financial conditions. JEL Classification: E44, E52, F42, G15

Suggested Citation

  • Bletzinger, Tilman & Martorana, Giulia & Mistak, Jakub, 2026. "The evolution of financial conditions in the euro area and the United States: a Macro-Finance FCI perspective," Economic Bulletin Boxes, European Central Bank, vol. 6.
    • Handle: RePEc:ecb:ecbbox:2026:0006:5
    Note: 2652553
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    Keywords

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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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