SPY & Economic Policy Uncertainty Index
An index measuring the level of economic policy uncertainty in the United States based on newspaper coverage, tax code expiration data, and economic forecaster disagreement.
SPY Price
Economic Policy Uncertainty Index
Baker, Bloom, and Davis (baseline = 100)
What It Measures
The Economic Policy Uncertainty (EPU) Index quantifies how uncertain the economic policy environment is. It is constructed from three components: - **News Coverage** (50%): Frequency of articles in major newspapers containing terms related to economic policy uncertainty - **Tax Code Provisions** (16.7%): Number of federal tax code provisions set to expire in coming years - **Forecaster Disagreement** (33.3%): Divergence among economic forecasters on future government spending and CPI The index is normalized so that the average value equals 100 from 1985-2009. Values above 100 indicate above-average uncertainty.
Why It Matters
**Investment Decisions**: High policy uncertainty causes businesses to delay capital expenditures and hiring, slowing economic growth. **Market Volatility**: Spikes in policy uncertainty are associated with increased stock market volatility and risk premiums. **Consumer Behavior**: Uncertainty about tax policy, healthcare costs, and regulations can dampen consumer spending and confidence. **Credit Conditions**: Banks may tighten lending when policy uncertainty is high, amplifying economic slowdowns. **Forward-Looking**: Unlike many economic indicators that measure what has happened, EPU captures current sentiment about future policy direction.
Key Levels
Data Sources
SPY: S&P 500 ETF daily OHLCV data (1993-02-02 to 2026-02-13)
Policy Uncertainty: USEPUINDXM - Economic Policy Uncertainty Index from Baker, Bloom, and Davis
Units: Index, Not Seasonally Adjusted, Monthly