Analysts cite unresolved capital standards and resolution plans as key hurdles for the GSEs’ potential release from government control.
BTIG lowered its ratings on Fannie Mae (FNMA) and Freddie Mac (FMCC) to Neutral from Buy, citing uncertainty over their exit from conservatorship. The downgrade reflects concerns about unresolved capital standards and resolution frameworks required for the government-sponsored enterprises (GSEs) to operate independently.
The GSEs have remained under U.S. conservatorship since the 2008 financial crisis. While previous administrations discussed potential exits, progress has stalled due to regulatory and legislative challenges. Analysts note that clarity on capital requirements and resolution plans is critical for any near-term release.
Shares of FNMA and FMCC showed muted reaction in premarket trading, as investors await further developments on policy reforms.