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Turning back to the Federal Reserve, sources telling us our colleagues here at Bloomberg that a driving force behind the DOJ's decision to subpoena the Central Bank is the Federal Housing Finance Agency Director Bill Pulty. Director Pulty has been busy over the last week, some purchases of MBS and Focus as well. Director Pulty, Welcome to the program, Sir. You are cited in our story this morning. Just wanted
to give the opportunity to respond to it. Bill, What was your role in the developments over the weekend.
The DOJ's outside of my purview. This is out of my purview. I don't know anything about it, and I would refer you to the DOJ.
Bill, you haven't been shy of sharing your thoughts on the Federal Reserve before, particularly over the last twelve months. You thought that the chairman would ultimately resign. He's standing firm. Do you think this push against the Federal Reserve is actually leading to unintended consequences and leading this fed to dig in.
My main focus, John has been on reducing mortgage rates to the extent that we can do it. And increasing housing affordability. President Trump announced a huge thing last week when he decided that he was going to ban institutions from buying homes. Basically, the concept is that people should
be living in homes, not corporations. You know, we have a supply problem in this country, and obviously we're working on the demand side of things, because in some cases, affordability has gotten so tough that people don't even want to buy a home because of what Joe Biden did, and so we're reversing that. That's what we're focused on. We had a huge one to two punch last week. You saw mortgage rates moved twenty five bases points lower on the news that Fanny and Freddie have started to
undergo a two hundred billion dollar mortgage bond buy. And I think you're going to see some very exciting things come out of Davos with regard to the President on housing.
In a couple in a week.
Grector POLDI, you were with the President this weekend, I believe, traveling with him on Air Force one from Washington to Palm Beach. Did you talk about the Federal Reserve with him this weekend?
Obviously I would never talk about anything that the President and I talk about. I would say this that the President is late focused on housing affordability and reversing what has happened these last four years.
You look at the average mortgage payment.
Under Joe Biden, it's skyrocketed compared to what it was under President Trump's first term. We are focused on bringing down not only the mortgage rates, but also the day to day cost in upkeeping homes, which has to do with you know, whether it be your ongoing expenses, mortgage insurance, etc.
There are so many pieces to the cost.
Puzzle that at the FHFA US Federal Housing we are working to reduce the cost bird and that Americans have.
I know that you've seen the report from our colleagues. I've also got calls last night about the subpoena handed to the FED and was told that you were part of it, pulling together a report that then went to the DOJ. I just wanted to go since from you.
Did the President know this was coming?
The Treasury Secretary know this was coming? Have you had any of these conversations again.
On that matter, I'd refer you to the Department of Justice.
Okay, well, we'll wait to your the Department of Justice. When it goes back to the mortgage backed securities that you have been talking about, you already been purchasing about north of two hundred and thirty billion dollars of them last year. There is a cap. Do you expect to reach that cap this year?
I think all options are on the table.
President Trump is a president who keeps all options on the table. We announced this historic two hundred billion dollars buyback of mortgage bonds. This is a huge deal, and you know, we'll keep all options on the table. Look, we're doing our part of Fanny and Freddy. Most presidents didn't even know Fanny and Freddie existed. Obviously, your community in Bloomberg and all of us in the private sector
we know the importance of Fanny and Freddy. But for the average day American, they don't understand because the presidents.
Haven't made it a priority.
Average Americans haven't understood that presidents had this authority until President Trump found this authority, which is basically to utilize these companies to be companies. Imagine that get people to show up back to work. You know, we had sixteen thousand people. We have sixteen thousand people at the two companies. When I showed up on the scene and President Trump
came into office, they were all working from home. We'd go to these big buildings, air conditioning, spewing everywhere, spending fifty million dollars a year on leases.
Nobody was in these buildings. So we have turned around Fanny and Freddy.
They try to get President Trump to sell the companies, for the two companies together for one hundred billion dollars. I think the valuation of the companies is anywhere between five hundred billion and some say up to a trillion dollars.
A lot of people are hoping that there is some sort of initial public offering o those companies. Are you preparing them for that at some point later this year or next year.
We are fully prepared to do whatever the President would like us to do on that matter.
We have been getting prepared.
We are prepared, just like we are with the institutional home buying ban, just like we are with home builders. We have a full set of things to do, and once the President decides what to do, we go about executing them.
Director Pulti, a lot of people on Wall Street, we're pretty excited actually about your purchases of MBS some mortgage backed securities and saying that this shoulds like it should
be something that would bring down spreads. They were less excited about the idea of preventing institutions from buying single family homes, saying that it really do wasn't based in economics, considering that in certain regions in the country there's actually a glut of houses that this is not because of institutions that account for a relatively small portion of overall buyers.
What do you say back.
About the economic fundamentals behind this type of proposal and why it would bring down fordability and.
Increase the supply of houses.
Which is the ultimate issue that a lot of people.
Say, Well, it just makes economic sense. You talk about supply, I mean, you kind of gave me a narrative there, But if you look at the economic supply of things, the fact is you have you know, big corporations buying using long term paper, using their balance sheets to scoop up homes in a supply shortage as we call it, and they're in some cases buying these homes for twenty
thirty forty percent less than Americans are doing it. You know, President Trump was elected with a very very popular mandate. You know, sometimes people don't remember because it was a year ago, but it was a landslide victory, and he was given a mandate to reverse these last four years
of crazy inflation that happened under Joe Biden. And so I think it's very appropriate that we're doing everything that we can to reduce housing costs, and we're going to keep doing it, whether it's the institutional ban on buying, looking at all of the things that go into a home and owning a home. Americans need to own homes in this country, and we're committed to restoring that.
Director Poulty, did you study this in terms of this apply demand dynamic and whether it actually would reduce the cost of houses for individuals? Should there be a ban on single family housing, on institutions buying single family homes? Because a lot of people in the markets who have supported President Trump's policies and thinking of Neil data in particular, came out and said this is faulty economics.
Well, of course I've studied it. I've studied it my whole life. I mean, I grew up in the housing business. I grew up in the building business. I was on the board of Poulty homes for four years. I understand what institutional buying does. It's very powerful. I understand why Wall Street might not like it. But we serve the American people. We don't serve Wall Street. And President Trump is laser focused on doing the right thing, no matter
who it affects in terms of their pocketbooks. At the Wall Street level, he has focused, laser focused on action, not talk like so many of these Democrats, like Elizabeth Warren. You know, for years she would talk about all institutional buying. She didn't do anything. Joe Biden didn't do anything about it. President Trump is doing something about it.
Elizabeth Warren wanted to see an effort like this. Do you think the President is taking cues from some of the more populist wings of the Democratic Party.
No, I think Elizabeth Warren is going to have to take cues from us or she's going to continue to look like a fraud because she says all these things and then she does nothing about it.
You know, President Trump, he gets things done.
He said, look, we're going to ban institutional buying, and then we're going about both on an executive action front as well as codifying it in legislation. I mean the amount of momentum that we've had at the legislative level from you know, different Congress people. I was at the Financial Services Committee the other night.
People were ecstatic about this.
I also talked with multiple US Senators, many who are vying to sponsor the legislation. So this is a very big deal and I think it's going to happen.
Is the President going to declare a housing emergency in the United States.
That's entirely up to the President. I can tell you this. He is treating it with great urgency. He understands real estate very well. He understands the importance of keeping home prices up. He understands this issue very well. And we're working very well together, Secretary Turner, Secretary Bessett, Secretary Lutnik, the Vice President, Susie Wiles. This is an all hands effort,
James Blair in the White House. I mean, this is an all hands effort to reduce the cost of home ownership and get people, not corporations, back in homes.
We look forward to saying what comes in that effort. I right to Poty, we appreciate your time this morning, said thank you very much. The Federal Housing time right to Bill POLTI are the federals kind of, but much more on what's going to happen with housing in this country.