Institutional investor confidence has fallen to 73.4 in February from January’s revised reading of 77.0, says the State Street Investor Confidence Index.

The confidence of North American institutional investors fell to 85.5 in February, from a revised reading of 89.8 in January. The European index increased to 77.9 from 73.7 in January, and the Asian index declined to 81.9 from 82.9 this month.

Developed by Harvard University professor Ken Froot and director Paul O’Connell, — through State Street Global Markets’ research partnership, State Street Associates SSA — the index measures investor confidence on a quantitative basis, analyzing actual buying and selling patterns of institutional investors.

“Once again, we see that the risk appetite of North American institutional investors is negative this month, backed by further sales of U.S. equities,” said Froot. “This has led to the second consecutive month of record lows for global confidence. Asian and European confidence levels are more moderate, with the latter even seeming somewhat optimistic by historical standards.”

“It seems that our North American institutional investors currently agree more with the outlook of the bond market versus that of the stock market,” added O’Connell. “The slight but recurring inversion of the U.S. Treasury yield curve suggests concern that the Federal Reserve will raise interest rates before long. This suggests that even some equity investors worry that the Fed will end up reducing growth as it moves to contain inflationary pressures.”