By Shaina Mishkin

Fannie Mae and Freddie Mac stock were trading more than 30% higher on Thursday after President Donald Trump posted on social media late Wednesday that he is "giving very serious consideration to bringing Fannie Mae and Freddie Mac public." That doesn't necessarily mean the companies are closer to exiting conservatorship, TD Cowen analysts wrote.

The two companies, whose commonly used names are short for Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, provide liquidity to the mortgage market by buying and securitizing home loans. They have been under the conservatorship of the Federal Housing Finance Agency since the 2008 mortgage-led financial crisis.

The shares changed hands for just over $1 on average between 2020 and 2024 -- then Trump was elected. Freddie Mac and Fannie Mae shares were up 74% and 127% year to date, respectively, as of Wednesday's close, according to Dow Jones Market Data. They were up 32% and 31% on Thursday morning, respectively.

Trump on Wednesday night wrote on Truth Social that he is "giving very serious consideration to bringing Fannie Mae and Freddie Mac public," likely a reference to removing the companies from government conservatorship. "I will be speaking with Treasury Secretary Scott Bessent, Secretary of Commerce Howard Lutnick, and the Director of the Federal Housing Finance Agency, William Pulte, among others, and will be making a decision in the near future," he added.

Freddie Mac and Fannie Mae declined to comment on the Truth Social post. The FHFA, Department of Commerce and U.S. Treasury didn't respond to a request for comment sent after business hours on Wednesday.

Clear signs that the companies were any closer to release have been few and far between so far this year. Pulte, the head of Fannie Mae and Freddie Mac conservator Federal Housing Finance Agency, said in February that "while their conservatorships should not be indefinite, any exit from conservatorship must be carefully planned to ensure the safety and soundness of the housing market without upward pressures on mortgage rates."

Investors in the shares are betting that Trump's second administration will remove the companies from their government conservatorship. There are hurdles, including concerns about disruptions to the mortgage market, what happens to the Treasury's senior preferred stock purchase agreements and warrants that allow it to acquire 79.9% of both companies' common stock, and the question of what happens to the implied government guarantee on the mortgages it securitizes.

Trump's post doesn't necessarily mean that the likely timeline has changed for releasing the companies from conservatorship, TD Cowen analyst Jaret Seiberg wrote in a note Wednesday night. "We view this as Trump reaffirming his consistent view that recap and release should occur," the analyst wrote. "We do not see this as the President deciding to act. We continue to believe that decision will not occur until next year and will depend on if the political risk for acting can be justified."

The "sweet spot" for removing the companies from conservatorship remains late 2026 or early 2027, the analyst added. "It would mean the administration would need to start assessing how to proceed in late 2025 and early 2026."

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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May 22, 2025 09:55 ET (13:55 GMT)

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