Shares of "the two GSEs" suffer consecutive hits as Trump's mortgage-backed securities directive raises concerns over delayed privatization

Glonghui January 17｜The stock prices of Fannie Mae and Freddie Mac have continued their multi-day decline as the market grows increasingly uneasy about policy changes under President Trump, fearing these moves could hinder the two mortgage finance giants from exiting government oversight. In Friday’s trading, both Fannie Mae and Freddie Mac’s common shares plummeted by about 10%, reaching their lowest intraday levels since late November last year. Fannie Mae has now fallen for five consecutive trading days, while Freddie Mac has dropped for seven straight days. Both stocks have fallen more than 40% from the peaks reached in September, though they still remain up over 60% from a year ago. The two companies, which have been under Washington’s control since the financial crisis, previously saw significant gains in 2025 on market optimism about a forthcoming IPO. In August this year, news broke that the government was considering an IPO, potentially valuing the two companies at around $500 billion or even higher, with plans to raise about $30 billion by selling 5% to 15% of the shares, sending market sentiment soaring. However, recent proposals requiring Fannie Mae and Freddie Mac to buy mortgage-backed securities and doubts about whether a fundraising can happen in the short term have further dampened this optimism. Matthew Aks of Evercore ISI noted that the narrative of “the IPO is dead” is gaining traction, but that doesn’t tell the whole story. He commented, “I’ve heard some rumors that some investors who have been involved in this deal for a year have already made substantial profits and now think it’s time to take their gains and exit.” He still believes there is a way forward for investors, describing it as “not a full IPO, but still a path with more room for upside.”