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Pulte says Fannie, Freddie to execute bond purchase

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Affordability a key political issue in Trump's second term

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Fannie, Freddie disclosures show combined $17 billion in

cash

(Adds context starting in fourth paragraph)

WASHINGTON, Jan 8 (Reuters) - U.S. President Donald

Trump said on Thursday that he is ordering his representatives

to buy $200 billion in mortgage ‌bonds to bring down housing

costs, though he provided no specifics.

"Because I chose not to sell Fannie Mae and ​Freddie Mac in

my First Term ... it is now worth many times that ‍amount - AN

ABSOLUTE FORTUNE - and has $200 BILLION DOLLARS IN CASH," Trump

wrote ⁠in a post on ⁠Truth Social.

"I am instructing my Representatives to BUY $200 BILLION

DOLLARS IN MORTGAGE BONDS. This will drive Mortgage Rates ‌DOWN,

monthly payments DOWN, and make the cost ​of owning a home more

affordable," Trump wrote.

Federal Housing Finance Agency Director Bill Pulte said on X

that Fannie Mae and Freddie Mac will ⁠execute the purchase.

It was not immediately ‍clear what ​funds Trump was referring to

when he said the two government-owned mortgage finance companies

had $200 billion in cash. The combined cash and cash equivalents

listed on the two ‍firms' balance sheets in their third-quarter

earnings reports to the Securities and Exchange Commission was

less than $17 billion as of September 30.

The White House did not immediately respond to requests for

more information on Trump's statement.

Affordability of everything from groceries to homes has become

a hot political issue even as Trump has occasionally dismissed

affordability concerns and ​blamed inflation ‍on his Democratic

predecessor.

His public approval has mostly sagged since his inauguration as

Americans worry about the economy.

Trump's call to purchase $200 billion in mortgage bonds ​could

provide stimulus to the economy akin to what the Federal Reserve

did when it also bought those same types of bonds during the

pandemic and its aftermath, as part of an effort called

quantitative easing.

But in the Fed's case, it used money it created as the U.S.

central bank to fund the purchases. No other entity would have

the same ability, which could mean tapping ​resources that might

go to another use.

Trump has pressed the Fed to cut interest rates aggressively

and his policy, if implemented, would likely provide some of the

lift he's been seeking.