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EndGame Macro
RT @onechancefreedm: The Fed’s 2026 Stress Test: A Hypothetical Or A Warning About What Comes Next
A What If That Feels Too Real
The Federal Reserve calls its 2026 severely adverse stress test a hypothetical exercise, but the details sound more like a preview of the world we’re drifting toward. It’s officially designed to test bank resilience under extreme shocks, yet the assumptions inside reveal a deeper fear: that the era of disinflation is ending, and the next disruption won’t come from overheating demand but from a short lived inflation scare followed by a sharp deflationary bust.
The Fed’s model is built around a two stage breakdown with stagflation first, deep recession second, mirroring the institution’s anxiety about its own limits. After years of tightening, the world has grown used to high yields and strong dollars, but the financial system itself may not be able to survive them.
Inside the Hypothetical: When Inflation Fears Return
The scenario begins with what looks like a global inflation relapse. In the first quarter, the “Global Market Shock” assumes investors suddenly price in persistent inflation pressures: yields spike across the curve, commodities surge, and the dollar strengthens. Equities crash 54%, BBB spreads blow out to 5.7 percentage points, and the VIX shoots to 72, the kind of volatility only seen in systemic crises.
But this isn’t a random inflation event, it’s driven by non monetary shocks, much like what we see brewing now. Supply chains haven’t fully normalized since 2022, and new tariffs, logistics disruptions, and geopolitical tensions have created a world where inflation can flare without growth improving.
The Real World Setup That Mirrors the Scenario
Recent data confirms this underlying fragility. While inflation has cooled sharply from the 9.1% peak in 2022, disinflation’s progress has stalled. Supply chains are functioning better but not smoothly. As of late 2025:
•Tariffs have surged, with the U.S. imposing tariffs on Chinese imports, pushing up input costs and squeezing corporate margins.
•Global logistics remain fragile, with Red Sea attacks, Panama Canal droughts, and slower customs processing disrupting trade routes.
•Energy remains volatile, as geopolitical shocks from Eastern Europe to the Middle East keep oil prices jumpy.
•Wages and service inflation stay sticky, particularly in housing and healthcare, preventing inflation from returning fully to target.
This environment is exactly what the Fed’s stress test anticipates: a false inflation dawn, where prices rise for structural reasons like trade fragmentation, energy, and tariffs triggering tighter financial conditions even as underlying demand weakens.
The Second Act: Deflation After the Panic
Once that inflation scare breaks market confidence, the Fed’s scenario flips violently. Credit seizes up, asset prices collapse, and unemployment soars to 10%. Residential real estate falls 29%, commercial properties 40%, and risk assets never fully recover. Inflation plunges to 1%, policy rates return to 0.1%, and Treasury yields tumble to 2.3% on the 10 year. It’s a self inflicted liquidity trap, a world where fear of inflation births the very deflation it was meant to prevent.
This hypothetical tests whether the financial system can withstand a rapid regime shift from inflation anxiety to funding panic without breaking.
The Broader Message
The Fed’s 2026 scenario may be framed as a stress test, but it doubles as what could be a quiet admission of what’s coming. The Fed is effectively rehearsing how to manage a world defined by permanent instability and where tariffs, energy shocks, and geopolitics keep inflation volatile, and every attempt to control it risks triggering deflation.
The stress test is a hypothetical but not a fantasy. It’s a warning that the new normal is already here, one where inflation fears and liquidity squeezes coexist, and policy itself may become the next systemic risk.
LIVE NOW: Open [...]
RT @onechancefreedm: The Fed’s 2026 Stress Test: A Hypothetical Or A Warning About What Comes Next
A What If That Feels Too Real
The Federal Reserve calls its 2026 severely adverse stress test a hypothetical exercise, but the details sound more like a preview of the world we’re drifting toward. It’s officially designed to test bank resilience under extreme shocks, yet the assumptions inside reveal a deeper fear: that the era of disinflation is ending, and the next disruption won’t come from overheating demand but from a short lived inflation scare followed by a sharp deflationary bust.
The Fed’s model is built around a two stage breakdown with stagflation first, deep recession second, mirroring the institution’s anxiety about its own limits. After years of tightening, the world has grown used to high yields and strong dollars, but the financial system itself may not be able to survive them.
Inside the Hypothetical: When Inflation Fears Return
The scenario begins with what looks like a global inflation relapse. In the first quarter, the “Global Market Shock” assumes investors suddenly price in persistent inflation pressures: yields spike across the curve, commodities surge, and the dollar strengthens. Equities crash 54%, BBB spreads blow out to 5.7 percentage points, and the VIX shoots to 72, the kind of volatility only seen in systemic crises.
But this isn’t a random inflation event, it’s driven by non monetary shocks, much like what we see brewing now. Supply chains haven’t fully normalized since 2022, and new tariffs, logistics disruptions, and geopolitical tensions have created a world where inflation can flare without growth improving.
The Real World Setup That Mirrors the Scenario
Recent data confirms this underlying fragility. While inflation has cooled sharply from the 9.1% peak in 2022, disinflation’s progress has stalled. Supply chains are functioning better but not smoothly. As of late 2025:
•Tariffs have surged, with the U.S. imposing tariffs on Chinese imports, pushing up input costs and squeezing corporate margins.
•Global logistics remain fragile, with Red Sea attacks, Panama Canal droughts, and slower customs processing disrupting trade routes.
•Energy remains volatile, as geopolitical shocks from Eastern Europe to the Middle East keep oil prices jumpy.
•Wages and service inflation stay sticky, particularly in housing and healthcare, preventing inflation from returning fully to target.
This environment is exactly what the Fed’s stress test anticipates: a false inflation dawn, where prices rise for structural reasons like trade fragmentation, energy, and tariffs triggering tighter financial conditions even as underlying demand weakens.
The Second Act: Deflation After the Panic
Once that inflation scare breaks market confidence, the Fed’s scenario flips violently. Credit seizes up, asset prices collapse, and unemployment soars to 10%. Residential real estate falls 29%, commercial properties 40%, and risk assets never fully recover. Inflation plunges to 1%, policy rates return to 0.1%, and Treasury yields tumble to 2.3% on the 10 year. It’s a self inflicted liquidity trap, a world where fear of inflation births the very deflation it was meant to prevent.
This hypothetical tests whether the financial system can withstand a rapid regime shift from inflation anxiety to funding panic without breaking.
The Broader Message
The Fed’s 2026 scenario may be framed as a stress test, but it doubles as what could be a quiet admission of what’s coming. The Fed is effectively rehearsing how to manage a world defined by permanent instability and where tariffs, energy shocks, and geopolitics keep inflation volatile, and every attempt to control it risks triggering deflation.
The stress test is a hypothetical but not a fantasy. It’s a warning that the new normal is already here, one where inflation fears and liquidity squeezes coexist, and policy itself may become the next systemic risk.
LIVE NOW: Open [...]
Offshore
EndGame Macro RT @onechancefreedm: The Fed’s 2026 Stress Test: A Hypothetical Or A Warning About What Comes Next A What If That Feels Too Real The Federal Reserve calls its 2026 severely adverse stress test a hypothetical exercise, but the details sound…
Board meeting on stress tests transparency: https://t.co/TH8ICb3DuE - Federal Reserve tweet
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Clark Square Capital
RT @Reignots: None of the sell side dingdongs like $JEF have done a fraction of the alt data work @ClarkSquareCap and @tickerplus have been sharing which is why their analysis is always backwards looking and their price targets always a mirror of yesterday's close. https://t.co/8wbmuB1hza
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RT @Reignots: None of the sell side dingdongs like $JEF have done a fraction of the alt data work @ClarkSquareCap and @tickerplus have been sharing which is why their analysis is always backwards looking and their price targets always a mirror of yesterday's close. https://t.co/8wbmuB1hza
LuxExperience (US: $LUXE, formerly MYTE) reported 1Q26 results this morning.
Overall, I would characterize these as very solid, despite some short-term messiness as they begin to integrate Net-a-Porter/Mr. Porterand Yoox.
The standout was core Mytheresa, which posted accelerating GMV/revenue (+14%, and +12%, respectively) and doubled EBITDA margins to 3%. As far as NAP/MRP goes, the company is making progress in reducing costs (SG&A) and stabilizing top-line. Importantly, the company will complete the sale of The Outnet (part of the off-price division) for USD $30 million. This is a big win, as they will be able to reduce cash burn and get paid for a division that most analysts did not attribute much value to.
LUXE raised the full-year guidance for EBITDA to -2% to +1%(from -4/+1 previously) and lowered the GMV guide, but solely due to the disposal of The Outnet. Management also expects NAP/MRP to return to growth in 2H26, but I think this may be sooner, as recent web traffic trends continue to accelerate (see attached).
Valuation remains quite compelling. I see the company hitting ~8% EBITDA margins in ~2 years, which would translate to about EUR 200million in EBITDA for MYTE/NAP/MRP (excluding Yoox). This is on a current EV of roughly EUR 900 million (assuming they can keep EUR 300m of the cash). At a 10x EBITDA multiple, this would be a $18 stock, or about a double from here. tweet
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Clark Square Capital
RT @Reignots: None of the sell side dingdongs like $JEF have done a fraction of the alt data work @ClarkSquareCap and @tickerplus have been sharing which is why their analysis is always backwards looking and their price targets always a mirror of yesterday's close. https://t.co/8wbmuB1hza
tweet
RT @Reignots: None of the sell side dingdongs like $JEF have done a fraction of the alt data work @ClarkSquareCap and @tickerplus have been sharing which is why their analysis is always backwards looking and their price targets always a mirror of yesterday's close. https://t.co/8wbmuB1hza
LuxExperience (US: $LUXE, formerly MYTE) reported 1Q26 results this morning.
Overall, I would characterize these as very solid, despite some short-term messiness as they begin to integrate Net-a-Porter/Mr. Porterand Yoox.
The standout was core Mytheresa, which posted accelerating GMV/revenue (+14%, and +12%, respectively) and doubled EBITDA margins to 3%. As far as NAP/MRP goes, the company is making progress in reducing costs (SG&A) and stabilizing top-line. Importantly, the company will complete the sale of The Outnet (part of the off-price division) for USD $30 million. This is a big win, as they will be able to reduce cash burn and get paid for a division that most analysts did not attribute much value to.
LUXE raised the full-year guidance for EBITDA to -2% to +1%(from -4/+1 previously) and lowered the GMV guide, but solely due to the disposal of The Outnet. Management also expects NAP/MRP to return to growth in 2H26, but I think this may be sooner, as recent web traffic trends continue to accelerate (see attached).
Valuation remains quite compelling. I see the company hitting ~8% EBITDA margins in ~2 years, which would translate to about EUR 200million in EBITDA for MYTE/NAP/MRP (excluding Yoox). This is on a current EV of roughly EUR 900 million (assuming they can keep EUR 300m of the cash). At a 10x EBITDA multiple, this would be a $18 stock, or about a double from here. tweet
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Fiscal.ai
Google just surpassed Microsoft to become the world's 3rd largest company by market cap.
$GOOGL $MSFT https://t.co/XxxIu9NRIj
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Google just surpassed Microsoft to become the world's 3rd largest company by market cap.
$GOOGL $MSFT https://t.co/XxxIu9NRIj
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WealthyReadings
I constantly try to look for the best possible set up. And build large positions once I find it. My conditions are pretty strict.
1. Strong fundamentals and narratives.
2. Correct valuation or undervalued.
3. Positive or neutral price action.
What stock would fit those today?
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I constantly try to look for the best possible set up. And build large positions once I find it. My conditions are pretty strict.
1. Strong fundamentals and narratives.
2. Correct valuation or undervalued.
3. Positive or neutral price action.
What stock would fit those today?
tweet
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Quiver Quantitative
JUST IN: Representative Michael Guest just filed a purchase of Monolithic Power stock, $MPWR.
It is his first trade filed in almost a year.
Guest is the chairman of the House Ethics Committee. https://t.co/LSFKNNC78M
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JUST IN: Representative Michael Guest just filed a purchase of Monolithic Power stock, $MPWR.
It is his first trade filed in almost a year.
Guest is the chairman of the House Ethics Committee. https://t.co/LSFKNNC78M
tweet