In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, Freddie Mac has released its 2023 Stress Test Disclosure, which reflects two hypothetical economic scenarios, including a “severely adverse” scenario. Under the latter, Freddie Mac would face a credit loss of $13.7 billion — or 0.4% of its total portfolio — under the adverse scenario.

Losses under the 2023 scenario are higher when compared to the results of the 2022 test. Last year, the GSE was projected to face a credit loss of only 6.3%, or 0.19% of its average portfolio balance.

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