[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  EndGame Macro [@onechancefreedm](/creator/twitter/onechancefreedm) on x 39.6K followers Created: 2025-07-10 02:02:13 UTC What the Fed Isn’t Saying But Is Quietly Preparing For The Federal Reserve isn’t sounding alarms. It’s publishing clinical, seemingly routine documents that, when read together, quietly sketch the blueprint of a monetary regime that’s running out of road. Two recent releases, The 2025 Stress Test Results and The Zero Lower Bound Remains a Medium-Term Risk, don’t just reflect a worst case scenario. They encode the Fed’s base case expectation: that the next economic downturn will be so severe, so fast moving, and so volatile that rates won’t just fall, they’ll slam into zero again and stay there. The stress test simulates a collapse: a XX% stock market plunge, XX% commercial real estate drawdown, XXX% GDP contraction, XX% unemployment, and an immediate drop in short-term interest rates to zero. That’s not a stress test, it’s a controlled demolition scenario. The banks are shown to survive only because the model assumes continued profitability based on trailing earnings. In reality, pre-provision net revenue vanishes quickly in crises. So while the capital buffers look solid on paper, they depend on lagging metrics and heroic assumptions. If earnings evaporate, as they almost always do during shocks, the entire capital position deteriorates just as losses mount. This isn’t resilience. It’s a fragile placeholder. Now layer in the Fed’s parallel analysis from Liberty Street Economics. Despite rates hovering above 5%, the probability of hitting the zero lower bound again within seven years is already 9%. But that figure is conservative. The real driver isn’t the current level of rates, it’s the level of macro uncertainty. The Fed’s own distributional modeling shows that when volatility rises, even without recession, policy space collapses. The path dependency of market expectations pulls the entire yield curve toward the floor. In short: the more unstable the outlook, the faster the Fed loses room to maneuver. Read together, these reports offer a candid glimpse into what the Fed sees coming, but cannot say out loud. They are preparing for a regime where interest rates become ineffective, where liquidity, not price, is the only lever left. And they know it will not be a soft landing. The implication is that the system is already overstretched, and the next true shock will corner the Fed back into 2008–2020 playbooks of emergency lending, QE, collateral backstops, FX swaps, and a return to the floor of the zero bound. This isn’t overreaction or academic hedging. It’s quiet forewarning. A document trail that positions the Fed to claim foresight when the next crisis erupts. Not because they can stop it, but because they expect to be powerless when it arrives. If you read carefully, the message is unmistakable. They’re not just modeling collapse. They’re bracing for it. And they know the economy will break hard enough to drag rates back to zero…again.  XXXXXX engagements  **Related Topics** [fed](/topic/fed) [federal reserve](/topic/federal-reserve) [macro](/topic/macro) [Post Link](https://x.com/onechancefreedm/status/1943128594915393743)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
EndGame Macro @onechancefreedm on x 39.6K followers
Created: 2025-07-10 02:02:13 UTC
What the Fed Isn’t Saying But Is Quietly Preparing For
The Federal Reserve isn’t sounding alarms. It’s publishing clinical, seemingly routine documents that, when read together, quietly sketch the blueprint of a monetary regime that’s running out of road. Two recent releases, The 2025 Stress Test Results and The Zero Lower Bound Remains a Medium-Term Risk, don’t just reflect a worst case scenario. They encode the Fed’s base case expectation: that the next economic downturn will be so severe, so fast moving, and so volatile that rates won’t just fall, they’ll slam into zero again and stay there.
The stress test simulates a collapse: a XX% stock market plunge, XX% commercial real estate drawdown, XXX% GDP contraction, XX% unemployment, and an immediate drop in short-term interest rates to zero. That’s not a stress test, it’s a controlled demolition scenario. The banks are shown to survive only because the model assumes continued profitability based on trailing earnings. In reality, pre-provision net revenue vanishes quickly in crises. So while the capital buffers look solid on paper, they depend on lagging metrics and heroic assumptions. If earnings evaporate, as they almost always do during shocks, the entire capital position deteriorates just as losses mount. This isn’t resilience. It’s a fragile placeholder.
Now layer in the Fed’s parallel analysis from Liberty Street Economics. Despite rates hovering above 5%, the probability of hitting the zero lower bound again within seven years is already 9%. But that figure is conservative. The real driver isn’t the current level of rates, it’s the level of macro uncertainty. The Fed’s own distributional modeling shows that when volatility rises, even without recession, policy space collapses. The path dependency of market expectations pulls the entire yield curve toward the floor. In short: the more unstable the outlook, the faster the Fed loses room to maneuver.
Read together, these reports offer a candid glimpse into what the Fed sees coming, but cannot say out loud. They are preparing for a regime where interest rates become ineffective, where liquidity, not price, is the only lever left. And they know it will not be a soft landing. The implication is that the system is already overstretched, and the next true shock will corner the Fed back into 2008–2020 playbooks of emergency lending, QE, collateral backstops, FX swaps, and a return to the floor of the zero bound.
This isn’t overreaction or academic hedging. It’s quiet forewarning. A document trail that positions the Fed to claim foresight when the next crisis erupts. Not because they can stop it, but because they expect to be powerless when it arrives. If you read carefully, the message is unmistakable.
They’re not just modeling collapse. They’re bracing for it. And they know the economy will break hard enough to drag rates back to zero…again.
XXXXXX engagements
Related Topics fed federal reserve macro