Trump wants purchase of $200 billion in mortgage bonds. What that means for mortgage rates.

Core Viewpoint - The U.S. government is considering measures to make home ownership more affordable, with President Trump proposing a $200 billion purchase of mortgage bonds to lower mortgage rates and monthly payments [2][3]. Group 1: Government Involvement in Housing Finance - The U.S. government plays a significant role in housing finance, primarily through a $9 trillion market for agency-backed mortgage bonds with guarantees [1][6]. - Government guarantees reduce credit risks for bond investors, making credit more accessible, although bond values can decline sharply during periods of rate volatility [7]. Group 2: Proposed Actions and Implications - President Trump has directed representatives to buy $200 billion in mortgage bonds, which he claims will reduce mortgage rates and make home ownership more affordable [2][3]. - Speculation suggests that Trump may be referring to Freddie Mac and Fannie Mae, two government-sponsored enterprises that have been in conservatorship since the 2008 crisis [4]. - Experts indicate that while this could temporarily boost GSE revenue, the impact on rates may be limited, as $200 billion is not substantial enough to exert significant downward pressure on rates [5][6].