Banks Pass the Stress Test

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The Federal Reserve announced that it intends to start tapering Quantitative Easing in late 2021 – early 2022. Simultaneously, the Fed may consider raising rates during the same time period. What does that mean for the economy?

Major banks just underwent a Fed Stress test; a simulation to determine how major financial institutions an deal with a monetary crisis. See the full report here:

The results were that the banks could suffer almost $500M in losses and still meet liquidity requirements. The good news? The banks can now resume their dividend and buyback increases. Here is a summary of their results:

JP Morgan plans to raise Quarterly Dividends are up to $1

Bank of America is planning a 17% dividend increase

Goldman Sachs plans to raise Quarterly Dividends are up to $2

What’s this mean for your money? Talk you your investment adviser at least annually to make sure your life events and circumstances are taken into account with your investments. If you aren’t happy with how your investments have been doing, discuss different strategies or even get a second opinion.

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