While President Trump is entrusting Bill Pulte with the nation's biggest secrets, shareholders in Fannie Mae and Freddie Mac are losing some faith.
Shares for the government-sponsored enterprises dipped after the president's announcement Tuesday that the Federal Housing Finance Agency director would be acting Director of National Intelligence. Pulte, also chairman of both Fannie and Freddie, will remain in those roles as he replaces Tulsi Gabbard, who submitted her resignation effective June 30.
The new chief of the government's intelligence agencies, who briefly worked at his grandfather's company and led an investment firm, has no prior public experience in a national security role. He's a prominent Trump ally who has initiated mortgage fraud probes into lawmakers and others viewed as opponents to the Trump Administration's agenda, although none of those accusations have resulted in indictments.
"William has deep experience managing the most sensitive matters in America, the safety and soundness of the Markets, and over 10 Trillion Dollars at Fannie Mae/Freddie Mac, a substantial increase from where it was just 12 months ago," wrote President Trump on his Truth Social platform Tuesday morning.
Under Pulte's watch, the quasi-public GSEs have continued to grow, with portfolios to $7.8 trillion.
Spokespersons for the FHFA, Fannie Mae and Freddie Mac did not respond to requests for comment Tuesday.
Fannie Mae's stock was trading around $7.06 per share midafternoon Tuesday, down nearly 5% from market open, while Freddie Mac was down similarly at $6.18 per share from an open of $6.47. GSE shares have fluctuated wildly this year, as the Trump administration has weighed conservatorship exit plans for the mortgage giants.
Industry reaction
Some public figures have voiced their confusion at the move on social media, noting some concern around Pulte's newly divided attention. Democrat leaders, including Sen. Elizabeth Warren, D-Mass., ranking member of the Senate Banking, Housing and Urban Affairs Committee, slammed the move and cited past scrutiny of Pulte's perceived political attacks.
Analysts at Keefe, Bruyette & Woods in a flash note Tuesday suggested that if Pulte were to formally depart the FHFA, it could be a positive indicator for privatization.
"While Director Pulte has voiced support for GSE privatization, it does not appear that FHFA has actively taken steps to meaningfully further the process, for example by revisiting the capital rule that was put in place by Mark Calabria during Trump 1.0," the analysts wrote.
Jaret Seiberg, an analyst at TD Cowen, also said Tuesday's announcement makes an already operationally and politically difficult conservatorship exit less likely.
"We do not see how one could surmount those obstacles if the FHFA director is devoting most of his time to national security issues," he wrote.
