Fannie and Freddie will be able to retain all their second-quarter profits, rather than forward them to Treasury. Combined, the GSEs will add $5.2 billion to their net worth this month.
SOFR-linked debt is vulnerable to much higher rate volatility than those referencing LIBOR. This risk was highlighted last month when surging repo rates sent SOFR briefly to a record 5.25%.
California remains the mother lode for Fannie Mae and Freddie Mac. In the first six months of 2019, the GSEs purchased $58.1 billion in loans from the Golden State.