The Federal Reserve has unveiled its 2025 stress test, which focuses on resilience against significant downturns in the real estate market and credit conditions. The test assumes a severe scenario involving a recession accompanied by a sharp decline in interest rates and inflation, but notably does not account for stagflation. This omission has raised concerns among economists, including Peter Schiff, who warns that if inflation rises instead, major banks may struggle to survive. Following the announcement, Citigroup shares rose by 2.9%, while Morgan Stanley, Goldman Sachs, and Bank of America saw gains exceeding 1.5%. The Fed's approach has been criticized for its lack of contingency planning for stagflation, which could pose a serious threat to the economy.