Continue reading below or watch Stephen Rudner’s hot take on video.

Logistics questions are top of mind this morning for our customers who are Fannie, Freddie, and Ginnie MBS market participants because the logistics are the difference between a disrupted, confusing market and a more normal one.  

Here are some of the questions you probably asked yourselves last night: 

What coupons will be bought? Buying par coupons would likely have the most impact to lower primary rates, the mortgage rates to homeowners. But other coupons could be bought. 

Will Ginnie Mae issuances be emphasized, given their direct impact on first time homebuyers. Will purchase money loan collateral be favored over refinances? 

Over what period of time will the purchases take place? If purchased all at once, it would have the most material impact on mortgage rates, perhaps lowering them 20-30 bps, by some estimates, but wow that’s a lot of market disruption. And given how things go, after such action, mortgage rates could whipsaw back up. If MBS purchases are spread out over some time, are the mid-term elections a factor for timeline? In a measured gradual purchase timeline, wouldn’t the amount of mortgage rate lowering be much smaller, like in single digits of basis points? 

Will there be a $ cap perceived in the marketplace for expiration of this buying program? Are the agencies’ ability to issue debt to be considered? How do the capitalization requirements for the GSE’s dovetail into this, those imposed by the FHFA? 

Interesting the tweet from the President said Mortgage Bonds. Wouldn’t whole loans be more economic? But maybe the choice to buy and hold MBS, and not whole loans, is because of the capital regs. 

That’s just scratching the surface. 

But I’m interested in the policy aspect: using the GSEs portfolios to lower mortgage rates. Commentators have called it an end-around of the Fed to effectuate an aspect of Quantitative Easing. Sure, it’s unconventional. It is unnerving to veteran monetary policy wonks and requires some thought about unintended consequences and precedents. The Executive Branch of government, alone, has few options for acting to address home affordability. But this White House might have found one. 

High home prices, homeowners who can’t economically move because they don’t want to give up their epically low COVID stimulus mortgage rates, etc. are all part of the COVID stimulus hangover. It has lingered on for years. Our MBS trading customers may not like yesterday’s tweet from the President, and they have a lot of unanswered questions. But part of me celebrates the bold and the new. Having a politically controlled lever for moving mortgage rates is a scary concept. It’s why the Fed independence is so cherished. But maybe, if we are fortunate, this will work and will not become custom or practice. 

That’s my hot take for the morning of January 9th 2026. I think Larry David said you can’t really wish someone a Happy New Year after January 4th, but I hope this finds all of you well.