Treasury Secretary Scott Bessent said that any release of the two giant government-sponsored enterprises, Fannie Mae and Freddie Mac, from their current conservatorship would depend on the implications for mortgage rates.
"Right now, the priority is tax policy — once we get through that, we will think about" reforms to Fannie and Freddie, Bessent said after a televised interview with Bloomberg's Saleha Mohsin on Thursday. The federal government seized direct control of the two companies during the great financial crisis amid the US housing meltdown.
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The shares of Fannie and Freddie hit their highest levels since 2019 last month after the outgoing Biden administration set out a roadmap for releasing them from government supervision. Hedge fund manager Bill Ackman recommended the stock, arguing that the duo had improved their capital positions.
"Anything that is done around a safe and sound release is going to hinge on the effect of long-term mortgage rates," Bessent said.
He said the "most important metric" he is looking at is any study indicating that those rates would go up.
