Core Viewpoint - President Trump's suggestion for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds may not effectively assist average Americans in affording homeownership and could potentially harm financial markets [1][2]. Group 1: Policy Intervention - Trump directed representatives to buy $200 billion in mortgage bonds, likely referring to Fannie Mae and Freddie Mac [2] - This was the second instance in a week where Trump suggested policy intervention in the housing market, following his call to ban institutional investors from purchasing single-family homes [2]. Group 2: Role of Fannie Mae and Freddie Mac - Fannie Mae and Freddie Mac play a crucial role in the housing market by buying mortgages from banks, enabling lenders to extend more credit to borrowers [3] - They package these loans into bonds, which helps mitigate risk and provides a steady income stream for investors like pension funds and insurance companies [4]. Group 3: Mortgage Market Dynamics - The mortgage market has approximately $13.5 trillion in outstanding debt, which is supported by the activities of Fannie Mae and Freddie Mac [4]. - Mortgage rates typically follow the trends of the 10-year U.S. Treasury note, influenced by the average age of outstanding home loans being 6.3 years [5]. Group 4: Impact of Government Debt - Elevated Treasury yields are partly due to the U.S. government's significant deficit, worsened by Trump's tax and spending bill [5]. - The increase in debt and deficits is projected to drive up interest rates, with the 10-year Treasury yield expected to be 1.4 percentage points higher by 2054 due to the bill [6].