What strikes us most about FHFA’s stress-test results is what’s missing. FHFA has for years not only detailed test components and how they flow through GSE balance sheets, but also the bottom line – the draw the GSEs would need from Treasury if the severely-adverse scenario came true. This year, this important total is missing, leaving one only to infer GSE vulnerabilities under stress. From what we can tell, it’s considerable.
The full report is available to subscription clients. To find out how you can sign up for the service, click here.