The $21 Billion Iceberg Tip
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.

GSE-080221.pdf