The biggest US banks would be able to absorb more than $708 billion in losses in a severe global recession while continuing to lend to households and businesses, according to the Federal Reserve’s annual stress test released Wednesday.

All 32 banks examined by the Fed remained above their minimum capital requirements under the regulator’s hypothetical scenario, which included unemployment surging to 10%, a 39% drop in commercial real estate prices and a 30% decline in home prices.

The industry’s common equity tier 1 capital ratio, a key capital measure that would absorb losses in a downturn, fell by 1.6 percentage points during the exercise, remaining comfortably above required minimums. Projected losses for the group included roughly $200 billion tied to credit cards, $160 billion from commercial and industrial loans and $75 billion from commercial real estate. (CNBC – Continue Reading)

President Donald Trump's administration asked the US Congress on Wednesday for $87.6 billion in additional funding, most of it for "urgent needs" related to the Iran war, as well as for a response to the Ebola outbreak in Africa.

The request, posted ⁠on the White House website, included $67.15 billion for the military. The White House said the request includes $21 billion for the Pentagon to procure munitions, strengthen the US industrial base and support critical capabilities.

It also includes $500 million for Global Health Security to prevent, detect and respond to the ⁠Ebola outbreak in the Democratic Republic of the Congo, Uganda and other countries. "This funding is critical to protect Americans, and stop the spread to ⁠the United States," the White House said. (RTRS – Continue Reading)

Australian hiring rebounded in May, reversing the previous month’s losses, while the jobless rate edged lower in a validation of the Reserve Bank’s view the labor market still remains tight.

The economy added 40,300 jobs last month, driven primarily by part-time roles, compared with an estimated 32,500 increase, data from the Australian Bureau of Statistics showed Thursday. Job losses in April were revised significantly to a 40,700 decline from 18,600 initially reported. Unemployment dipped to 4.4% in May from 4.5%, matching economists’ forecasts. (BBG – Continue Reading)

Japan's government will call for monetary policy that bolsters private demand, a draft of its long-term economic blueprint seen by Reuters showed, signalling its preference for the central bank to keep borrowing costs low.

The draft also urges the Bank of Japan (BoJ) to align its decisions with Prime Minister Sanae Takaichi's push to reflate growth, citing legal provisions requiring the central bank to coordinate policy with the government.

The dovish tone of the blueprint, which anchors long-term economic policy, may influence the BoJ's decisions on both the pace and timing of future rate increases as it transitions away from years of ⁠ultra-low borrowing costs. (RTRS – Continue Reading)