Fed Stress Test Shows Largest U.S. Banks Could Weather a Severe Recession

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• The Federal Reserve’s annual stress test found all 32 large U.S. banks remained above minimum capital requirements under a severe recession scenario.
• Banks were projected to absorb more than $708 billion in loan losses while continuing to lend to households and businesses.
• The hypothetical scenario included a 39% decline in commercial real estate prices, a 30% drop in home prices and unemployment rising to 10%.

June 26, 2026 – via  CurrencyNewsWire — According to the Federal Reserve’s annual bank stress test, the nation’s largest banks remain well capitalized and capable of continuing to support the economy during a severe downturn. Despite projected loan losses exceeding $708 billion under the Fed’s hypothetical recession scenario, all 32 banks tested maintained capital levels above their minimum regulatory requirements.

The Federal Reserve said projected losses included approximately $200 billion in credit card loans, $160 billion in commercial and industrial loans, and $75 billion in commercial real estate. While aggregate capital declined by 1.6 percentage points during the scenario, higher projected interest income helped…

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