"Soft Landing" for the Economy - Part 2: Stress Test and the Fed's Defense

All 23 large banks participating in this year's Fed stress test passed the rigorous test assuming the worst possible economic scenario. The results confirm that the reserve capital from these large banks can withstand the economic shocks set by the Fed, under the legal requirements framework from the Dodd-Frank Act. 

However, these 23 large banks with deep systemic risks do not represent the 2 failures of the US banking system in the first half of this year. Both Silicon Valley Bank and First Republic Bank are regional, mid-sized banks… representing those struggling with losses from bonds… 

Can the positive stress test results extinguish the fear from the current credit crunch risk? What other defenses does the Fed have besides soft-landing to prepare for the 2 upcoming rate hikes at the end of this year?

Last week's macroeconomics article analyzed the Fed's soft-landing possibility from the perspective of consumption and labor. Therefore, this week, Viet Hustler will continue to discuss the soft-landing possibility from the perspective of credit crunch and the resilience of the banking system (as shown in last week's stress test results). 

Can the positive stress test results extinguish concerns about credit crunch?