The Fed's Stress Tests Are Worthless

The Fed's stress tests are worthless. The most adverse scenario assumes both inflation and long-term interest rates fall during the next recession,. No major bank could survive stagflation. That's why the Fed doesn't test for it. I nailed this three years ago. And if you don't believe me, you could just look at Twitter because I happened to pull up this tweet and I retweeted it today. It was from June 21st of 2019. This is when they had announced the results of these stress tests that all the banks passed. They were testing for the wrong thing.