Abstract

Financial indicators play an important role in linking firms' microeconomic performance with the broader macroeconomic conditions of national economies. One such indicator is the Fear Index, which is calculated on the basis of the (future) prices of derivative contracts on large-cap stock market indices. The Fear Index serves as a measure of market sentiment, and any significant fluctuations in it can exert either a positive or a negative influence on financial markets. At the international level, the imposition of additional tariffs, the situation in South America, and ongoing developments in the Middle East and Ukraine should not be viewed solely as geopolitical crises, since financial markets price investors' perception of fear, thereby creating conditions that may increase the risk of persistent inflation. Consequently, an energy crisis may evolve into a fiscal crisis, leading to higher government bond yields and rising interest rates.