6.19.20
Federal Reserve (Fed) Vice Chair of Supervision Randal Quarles announced last Friday that the next round of annual stress tests will include a “sensitivity analysis” regarding various COVID-19 scenarios. “We simply would not have been doing our jobs if we had just run the test using a scenario framed before the economy began to deteriorate… There’s probably never been more uncertainty about the economic outlook,” said Quarles. The annual tests were released on Thursday and the scenarios include a V-shaped economic outlook with the economy recovering at the end of 2020, a U-shaped economic outlook, and a W-shaped economic outlook.