President Donald Trump made a lot of promises on the campaign trail, and now that his second term has begun, Wall Street is keeping a close eye on one in particular: the privatization of mortgage companies Fannie Mae (FNMA) and Freddie Mac (FMCC), which has been under government conservatorship since the 2008 financial crisis. Investors are bullish it could finally happen, with shares of Fannie quadrupling since his election. Sheila Bair, former chair of the FDIC agrees, saying it’s time for Fannie and Freddie to go private again.
“That is far too long for any financial institution or any institution to be in a government-run conservatorship,” she said. “It hurts agility, it hurts decision-making, it hurts the ability to bring in top talent to get the tech that you need. So it does need to be privatized.”
Bair, who was chair of the Fannie Mae board from 2020 to 2022, explained that one of the reasons she agreed to join the board was because she believed Fannie Mae would be going private again.
“That was one of the reasons I joined the board and became chair because I thought we were gonna exit,” Bair said, “Which I think needs to happen. And a lot of preparation work had already been done. And then of course, the (2020) election happened and there was a complete shift in priorities.”
Now there’s been another shift, and Trump has retaken the White House. Of course, the new administration has plenty of other things to focus on first, and the process to privatize Fannie and Freddie could take years, so it’s anyone’s guess as to whether President Trump will actually pull the trigger.
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This post was written by Conor White.
