Good morning. Big U.S. banks passed their latest annual stress test, with the Federal Reserve finding they would be able to continue lending to households and businesses in a severe recession even while suffering steeper losses than last year’s tests.

• The report: This year’s exercise measured the 31 biggest banks’ ability to maintain strong capital levels in a hypothetical recession marked by double-digit unemployment and a severe stock market decline.
   
• How much could they lose? The banks would collectively lose nearly $685 billion in the Fed’s imaginary worst-case recession, the Fed said. That would be more than last year, but all the banks would still remain above their minimum capital requirements.
   
• Increased potential losses: The banks were expected to lose more in this year’s test because they faced higher projected credit-card losses, riskier corporate loans and lower projected income, the Fed said.
   
• What the test is for: The annual exercise aims to project confidence about the health of the banking system. If banks do poorly, they could face automatic restrictions on shareholder distributions and discretionary bonus payments. None of the banks face those limits after this round of tests.
   
• What are the implications? Wednesday’s results could give banks and their lobbyists more ammunition to push back against large increases in capital requirements, which the Fed and other regulators have floated. Supporters of the plan say it will improve the overall resilience of the financial system after a spate of regional bank failures last year.

U.S. recovers Monet painting, Paris apartment from 1MDB fugitive Jho Low.

The family of fugitive financier Jho Low will turn over to U.S. authorities a Paris luxury apartment and Andy Warhol and Claude Monet paintings, the latest in a string of settlements to resolve allegations that Low was the mastermind of the multibillion-dollar 1MDB fraud.

Part of asset recovery efforts. The $100-million recovery, announced by the Justice Department on Wednesday, adds to a sweeping, decadelong effort to recover more than $1 billion in similar assets tied to Low and return them to Malaysia. Prosecutors have filed dozens of forfeiture suits to recoup assets allegedly purchased with funds embezzled from 1Malaysia Development Bhd., or 1MDB, a Malaysian sovereign-wealth fund.

Ryan Cohen made $60 million selling Bed Bath & Beyond stock. Some board members worried secrets were passed to him.

A board member of Bed Bath & Beyond was concerned that some of her fellow directors shared inside information with Ryan Cohen before the investor abruptly dumped his stake in the company two years ago, according to newly revealed excerpts of testimony provided for a lawsuit.

“I certainly had questions about that,” Sue Gove said in a deposition provided for a shareholder lawsuit. When asked how many other members had concerns about Cohen’s board allies “signaling” information to him, she added: “I would, you know, venture to say that probably most of them.”

• The Financial Accounting Standards Board voted Wednesday to require U.S. publicly traded businesses to break out things like inventory purchases and employee compensation spending in the footnotes of their financial statements.
   
• BHP Group isn’t planning to use carbon offsets to meet its 2030 emissions goals, but hasn’t ruled them out, company officials said Wednesday as they highlighted the challenges of eliminating emissions from its global mining operations.
   
• Microsoft Chief Sustainability Officer Melanie Nakagawa says the members of her team are working their tails off to meet the company’s goal of being carbon neutral by 2030, but the path to getting there keeps her up at night.
   
• The Supreme Court on Wednesday rejected a lawsuit alleging that Biden administration officials unlawfully pressured social-media platforms to remove content flagged as disinformation.
   
• The Supreme Court overturned the bribery conviction of an Indiana mayor who took $13,000 from a local truck dealership after it won a city contract, ruling Wednesday that a federal anticorruption law applies only to payments for future official conduct, not gratuities for past acts.

Kenya’s tax U-turn highlights political realities of Africa’s high debt burden.

Kenyan President William Ruto said Wednesday that he would withdraw a proposed law on large-scale tax increases, a day after nationwide protests against the measures turned deadly.

The move highlights how the burden of repaying near-record high debts is increasingly running up against political realities in African countries.

The backdrop. Like many other African countries, Kenya has seen its public debt rise sharply over the past decade, as successive governments sold billions of dollars worth of bonds and took out infrastructure loans from China. Across sub-Saharan Africa, debt service on average ate up 47.5% of government revenue last year, more than double the level a decade ago.

• American arms shipments to Israel have slowed since the early months of the war in Gaza because many of the previously ordered weapons have already been shipped or delivered while the Israeli government has put in fewer new requests, U.S. officials said.
   
• Overvaluation of U.S. homes is a predictor of stagnant, even negative, real returns in coming years, a headwind to anyone counting on real estate as a source of wealth.
   
• French consumers are feeling less confident about their prospects amid surprise elections, a fresh headwind for the country’s fragile economic recovery. 
   
• Beijing became the last major Chinese city to trim mortgage rates and down-payment requirements for home buyers, part of growing efforts across the country to resolve a long-running property crisis.
   
• China denied that it has undermined U.S. diplomatic efforts in the country, rejecting allegations that U.S. Ambassador Nicholas Burns made in a recent interview with The Wall Street Journal.
   
• NATO’s next boss is a political survivor who has said “no” to Donald Trump.

• The Supreme Court appears ready to let emergency abortions be performed in Idaho, according to a draft version of a decision the court accidentally posted on its website Wednesday and then quickly removed. But the decision would likely leave unresolved challenges for physicians.
   
• Rep. Jamaal Bowman’s primary loss in New York was a victory for pro-Israel groups whose spending helped make the race the most expensive House primary ever, underscoring the political potency of the war in Gaza and the sharp lines it has drawn inside the Democratic Party.
   
• Ben & Jerry’s founders speak about mixing politics with business, the ice cream brand’s future and why Ozempic doesn’t worry them.
   
• Anyone who has called the Internal Revenue Service knows it can be frustrating to get help. Taxpayers successfully reached a human about 31% of the time this tax season, according to the agency’s own taxpayer advocate.
   
• Betting on the latest economic report could be as simple as choosing “yes” or “no.”

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