From Yahoo Finance: 2025-03-24 13:01:00

The stocks of Freddie Mac (FMCC) and Fannie Mae (FNMA) are surging amid speculation that the Trump administration may privatize the mortgage giants, with Treasury Secretary Bessent hinting at the government’s stake moving to a new US sovereign wealth fund. The Wall Street Journal reported the administration is considering studying their privatization. The stocks have risen over 350% since Trump’s election win.

FHFA Director William Pulte has replaced the boards of Fannie and Freddie, appointing himself as chairman. Both companies fell under government control during the 2008 financial crisis. Prominent investors like Bill Ackman have wagered on their return to private control. The argument for privatization is to generate revenue and reduce the deficit, while the argument against is potential market impact.

Stifel CEO Ronald Kruszewski suggested integrating Fannie and Freddie into a sovereign wealth fund for continued support, potentially generating $30 billion in annual income. Former FHFA head Mark Calabria put the odds of privatization within the next four years at 70%. The transition could pave the way for a $1 trillion sovereign wealth fund by 2040.



Read more at Yahoo Finance: Signs are mounting that Trump could take Fannie Mae and Freddie Mac private