I also suggested that the first step of the normalization process would be to increase the interest rate paid on reserves and the targeted federal funds rate away from the zero bound, perhaps to 50 basis points. The Federal Open Market Committee would also announce its intention to stop re-investing the proceeds from maturing agency and Treasury securities.
The more adverse scenario was designed to be severe but plausible, with a probability of roughly 10 to 15 percent that each of the macroeconomic variables could be worse than specified. The banks were asked to provide projections of losses and revenues under the two scenarios.