7 months ago
Trump Orders $200B Mortgage Bond Purchase
Donald Trump has told his representatives to buy $200 billion in mortgage bonds.
This is to make home loans cheaper.
The Federal Housing Finance Agency (FHFA) will do this.
They say they have the money and will do it soon.
Trump says this will help people buy homes more easily.
But some reports say the companies involved don't have as much cash as Trump says.
Experts think this might lower loan costs a little, but not as much as bigger actions in the past.
Donald Trump directed the purchase of $200 billion in mortgage bonds to reduce mortgage rates and monthly payments.
The Federal Housing Finance Agency (FHFA) will execute the purchase, with Director Bill Pulte confirming the agency's capability and readiness.
Trump claimed the move will make housing more affordable, criticizing the Biden administration's handling of the housing market.
Reports indicate Fannie Mae and Freddie Mac have less than $17 billion in cash, contradicting Trump's claim of $200 billion.
Experts expect the bond purchase to reduce borrowing costs by 10 to 15 basis points, a smaller impact compared to previous Federal Reserve actions.
- Who
- Donald Trump, Federal Housing Finance Agency (FHFA), Bill Pulte
- What
- Order to purchase $200 billion in mortgage bonds
- Where
- United States
- When
- 9 January
- Why
- To reduce mortgage rates and monthly payments, making housing more affordable
Trump Administration
Experts and Reports
Amount of Cash Available
Trump Administration
Trump claims Fannie Mae and Freddie Mac have $200 billion in cash.
Experts and Reports
Reports indicate Fannie Mae and Freddie Mac have less than $17 billion in cash.
Impact on Mortgage Rates
Trump Administration
Trump believes the move will significantly reduce mortgage rates and make housing more affordable.
Experts and Reports
Experts expect the bond purchase to reduce borrowing costs by only 10 to 15 basis points, a smaller impact compared to previous Federal Reserve actions.
Key facts
- Amount
- $200 billion
- Purpose
- Reduce mortgage rates and monthly payments
- Agency
- Federal Housing Finance Agency (FHFA)
- Director
- Bill Pulte
- Trump's Claim
- $200 billion in cash
- Actual Cash
- Less than $17 billion as of September 30
- Expected Impact
- 10 to 15 basis points reduction in borrowing costs
- Timeline
- No specific timeline provided
Quotes
Bill Pulte
Head of the Federal Housing Finance Agency
“The purchases wouldn’t hurt the government’s plan to sell some of its Fannie and Freddie stakes. The new investments will increase their earnings, he added. Pulte said Trump had a list of between 30 and 50 other housing ideas and would soon announce what will move forward.”
livemint.com
“Trump had authorized the securitization companies Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities, which Pulte described as the largest mortgage bond purchase in the companies’ history.”
livemint.com
Gennadiy Goldberg
Head of U.S. rates strategy at TD Cowen
“Before Trump’s announcement he expected 30-year mortgage rates to drop to 5.25% by the end of the year. If executed rapidly, the latest purchases could bring 30-year mortgage rates down to about 5%.”
livemint.com
Dan Coatsworth
Head of markets at AJ Bell
“The mining sector cannot give up on the mantra that bigger is better.”
livemint.com
Samuel Tombs
Chief U.S. economist at Pantheon Macroeconomics
“While some will interpret the increase as a sign that AI is starting to drive faster GDP growth, the reality is that 'productivity growth is often noisy from quarter-to-quarter' and subject to significant revisions.”
livemint.com
Stephen Stanley
Chief U.S. economist for Santander
“Productivity gains in 2025 represent a 'slight acceleration, but not a radical departure' from recent business cycle trends.”
livemint.com
Bernard von Gizycki
Research analyst at Deutsche Bank
“Although there might be some additional write-downs needed based on the current offer, Flagstar management 'has already taken marks and reserves against the loan.' He said if loan issues get resolved, it would be 'credit positive' for Flagstar.”
livemint.com
