Geopolitical, Financial Risk And Economic Policy Uncertainty

Up for geopolitical risk, not for financial.

Figure 1: Geopolitical Risk (GPR) index (blue), 7 day centered moving average (red). Source: Caldara et al.

Here are the subcomponents of GPR, GPRD-Action, GPRD-Threats.

Figure 2: Geopolitical Risk Action index (teal), GPR Threats (sky blue). Source: Caldara et al.

Economic policy uncertainty and financial risk are not similarly elevated, thus far (through 3/1 for EPU, through 3/2 noon CT for VIX).

Figure 3: EPU (brown, left scale), VIX (green, right scale). Source: policyuncertainty.com, CBOE via FRED.

That being said, elevated GPR and EPU both rose with slowing economic activity, as illustrated in this post.