Fed releases 2025 bank stress test scenarios

BY Reuters | ECONOMIC | 02/05/25 04:30 PM EST

WASHINGTON, Feb 5 (Reuters) - The Federal Reserve announced on Wednesday it would be testing big banks against heightened stress in commercial and residential real estate markets as part of its annual stress tests.

The Fed added the annual exams would include an additional exploratory component that would explore shocks in the non-bank sector, as well as the impact of hypothetical shocks of numerous large hedge funds on big bank finances. (Reporting by Pete Schroeder; Editing by Chris Reese)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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