Trump pledges Fannie Mae and Freddie Mac guarantees will continue

President Trump on Tuesday pledged the government would continue its guarantees for mortgage giants Fannie Mae and Freddie Mac, even as it moves toward possibly giving up control of the companies. Why it matters: Trump's promise may soothe long-standing nerves about what might happen to mortgage rates in a world where Fannie and Freddie no longer had government backstops. Between the lines: Before being taken into conservatorship in 2008, Fannie and Freddie had what was known as an "implicit guarantee" — the market's assumption that if something went wrong, the government would step in to save them.That's what ultimately happened in 2008.Catch up quick: Last week, Trump floated the idea of returning the companies to public control, almost 17 years after they were rescued during the financial crisis. On Tuesday, he went a step further.What they're saying: "I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump wrote on Truth Social Tuesday evening. He again referred to taking the companies public, though they're already publicly traded, albeit with the government holding most of the shares. What to watch: Trump's post may answer the existential question of a guarantee, but not the mechanics of how it would operate. The Senior Preferred Stock Purchase Agreements that serve as the vehicle for Treasury's support to the mortgage agencies are complicated and contentious arrangements.Unwinding them will require, as NYU's Furman Center wrote last month, "significant and controversial decisions."

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