Republicans may hope to use any windfall the government gets from selling its stake in the GSEs to offset revenue cuts in their “Big Beautiful Bill,” but housing advocates have other ideas.
In post on X, FHFA Director Bill Pulte nudged the Federal Reserve chair to hike rates: “Jerome Powell cut rates right before the election at ‘higher’ levels of inflation. Why won’t he cut now?”
President Trump said he’s seriously considering letting Fannie Mae and Freddie Mac go public. Industry participants are now waiting for specific details.
If confirmed as Treasury’s head of domestic finance, Jonathan McKernan could have a say in whether the GSEs are released from conservatorship. If so, he may have to renounce an FHFA rule created when he was senior counsel at the agency.
FHFA Director Bill Pulte made some media appearances recently, explaining some of the actions he’s taking and detailing priorities involving the GSEs and Federal Home Loan Banks.
Critics say capital is not necessarily the main impediment to ending the conservatorship. A bigger problem is the lack of planning on what the GSEs should look like after they exit.
Like most GSE reform plans, the hedge funder’s plan to privatize Fannie and Freddie starts with Treasury writing down its senior preferred shares and FHFA sharply reducing the capital requirements for the GSEs.
Smaller shops may support an end to the GSE conservatorships, but only if it’s done in a way that preserves pricing parity, avoids additional charters and maintains the cash window.
FHFA under the leadership of Bill Pulte has rescinded, deleted or closed at least eight agency directives without providing notice on the agency’s website or announcing the changes in a press release.
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