The Federal Reserve is seen in Washington, DC on June 14, 2017. AFP / Andrew CABALLERO-REYNOLDS
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Investors are hoping the Federal Reserve will allow big U.S. banks to put an estimated $150 billion in idle capital toward stock buybacks, dividends and profit-boosting investments in the coming weeks after conducting a regular examination of financial strength.Wall Street analysts said they would be parsing language the Fed uses in presenting the results for any signs that its approach is starting to soften.Analysts say they do not expect the Fed to announce any explicit changes to the stress test, but they do expect higher payouts. Banks going through the stress tests have roughly $150 billion more capital than they need, Morgan Stanley analyst Betsy Graseck estimates. She expects the typical big bank to be allowed to increase stock buybacks by 27 percent and dividends by 8 percent, for a combined capital payout of 95 percent of annual earnings, up from 84 percent last year.Shortly after the Fed posts its numbers, big banks tend to disclose results under their own models.
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