As of April 2026, 8 channels are flashing red — up from 6 in January. The geopolitical shock from the Strait of Hormuz disruption in late February/March 2026, combined with a VIX at 31+ and the 10-year Treasury yield falling below 4% (flight-to-safety pricing), has escalated the equity volatility channels to red and pushed IG credit conditions out of the "normal" zone.

We are now in a regime best described as elevated stress, not yet systemic. The core infrastructure — large bank CDS, overnight repo at its foundation — still functions. But eight active red flags across equity vol, treasury depth, bond vol, breadth/depth, CRE, and private credit represent a meaningfully more stressed environment than January.

The critical watch point: If Funding + Treasuries + Credit all flash red simultaneously, that would signal systemic conditions. We are not there yet — but the distance is narrower. Execution quality, capital discipline, and lender relationships are now the decisive variables.