Whatever befalls the Senate infrastructure bill, we believe its $21 billion GSE pay-for is but one bit of a bigger de facto transformation of the GSEs. We know of course that the Trump Administration’s near-term privatization is no more. But, what’s emerging now is incremental nationalization redefining Fannie and Freddie in ways that make unravelling their quasi-official status still more uncertain. We continue to think that the Biden Administration will opt for a utility along Obama lines, but that’s only if they think about the GSEs in anything other than a utilitarian way – which so far they have not.
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