All 22 Major US Banks Pass Fed Softer 2025 Stress Tests

The Federal Reserve's 2025 stress tests confirmed that all 22 of the largest U.S. banks remain well capitalized and resilient, capable of withstanding a simulated economic downturn with roughly $550 billion in losses while maintaining capital ratios well above regulatory minimums. However, this year’s stress scenario was notably less severe than in previous years, featuring milder contractions in unemployment, housing, commercial real estate, and stock prices, reflecting a weakened global economic outlook. The Fed reduced scrutiny on banks' exposure to private equity and did not test for private credit risk, despite concerns raised about the rapid growth of this $2 trillion asset class. Michelle Bowman, the Fed’s vice chair for supervision and an appointee of President Trump, highlighted the banks' strong capital positions and resilience. The Fed acknowledged that previous tests showed unintended volatility and announced plans to revise the stress testing framework, including seeking public and industry feedback to improve transparency and methodology. Proposed changes may also average results over two years and make scenarios publicly available starting in 2026.