Why Shares of Goldman Sachs Are Rising Today
Shares of Goldman Sachs (NYSE: GS) had risen nearly 5.4% as of 12:25 p.m. ET today after the Federal Reserve released its annual stress-testing results last night. Goldman Sachs performed well in the test.
Every year, the largest U.S. banks are put through a hypothetical economic scenario that is extremely severe so the Fed can see how banks would perform in order to ensure the safety and soundness of the banking system. The Fed also uses stress testing to help set minimum capital requirements for banks, and these determine how much capital banks can return to shareholders.
In this year's scenario, the Fed had unemployment surpassing 10%, commercial real estate prices falling 40%, and stock prices dropping 55% between the fourth quarter of 2021 and the first quarter of 2024.
Source Fool.com