While there are people in the U.S. Department of the Treasury who were officials in the first Trump administration and laid out a game plan for administrative ıslahat and removing Treasury from the GSEs’ capital structure, that conversation is not happening in public or inside the administration, he added.

“I don’t think that we are going to exit conservatorship anytime soon, unless things change.”

Stock markets reacted strongly to Pulte’s appointment. On Wednesday morning, Fannie Mae shares were down more than 2.2% to $6.89, while Freddie Mac shares fell 1.94% to $6.10.

Pulte’s qualifications

Pulte will remain in his current roles as director of the FHFA and chairman of Fannie and Freddie. He’ll also serve as the top official responsible for coordinating U.S. intelligence agencies and advising senior government leaders on critical issues — including terrorism, espionage, cyberattacks and foreign government activities.

Pulte is seen as a Trump ally, though his appointment is notable given his lack of a traditional military or intelligence background.

“Director Pulte’s stock has gone up,” Barath Sankaran, portfolio manager for mortgages at Loomis Sayles, said on stage Wednesday. “He has shown that he’s really good at combing through mortgage ownership information, and maybe deserves a role in national intelligence.”

As FHFA director, Pulte established a dedicated mortgage fraud tip line and issued criminal referrals to the Department of Justice regarding occupancy fraud. His efforts led to high-profile criminal referrals against Trump adversaries — including New York Attorney General Letitia James and Federal Reserve Governor Lisa Cook.

He was also a vocal participant in the administration’s pressure campaign against former Fed Chair Jerome Powell to cut interest rates.

Less active FHFA director?

“The idea that the director is going to be less active, and that there will be fewer things happening in the GSEs, is far too soon to tell,” Valverde said.

According to Valverde, Pulte is a proponent of selling GSE stock, an idea he will now have more opportunities to bring directly to the president in his new role. Last year, reports showed that government officials were valuing the GSEs at a combined $500 billion or more and were planning to sell off between 5% and 15% of their stock.

“If he is influential and you have a president focused on a transaction that indicates the true value of the GSEs — I have no reason to believe that has changed — now you have one of the proponents of that transaction getting daily updates with the president, and having a lot of face time and opportunity to raise those issues again,” Valverde said.

“I would not indicate or assume that things will slow down. They may actually accelerate, potentially, given the amount of connectivity he’s going to have with the administration.”

Bose George, an analyst at Keefe, Bruyette & Woods (KBW), released a note to investors following the announcement in which he referred to ongoing talks about returning Fannie Mae and Freddie Mac to the private sector.

“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,” George wrote.

“To the extent he chooses to leave the role as director of the FHFA, it could be viewed as positive for GSE privatization.”