For years, conservatives have rightly warned about the dangers of government meddling in the free market. But when it comes to the housing sector, some are now arguing that pulling Uncle Sam back could actually cause more harm than good. Pimco, one of America’s largest asset managers, recently voiced concern over one of President Trump’s highly anticipated moves: ending the government conservatorship of housing giants Freddie Mac and Fannie Mae.
Since Republicans swept into power last November, investors have eagerly anticipated the long-overdue privatization of these government-sponsored enterprises (GSEs). Speculative investors have already pushed shares of Freddie and Fannie sky-high, up about 270% and 350% respectively, betting big that the Trump administration will finally end more than sixteen years of government control. But Pimco’s team, led by Libby Cantrill, Daniel Hyman, and Mike Cudzil, issued a stark warning: a rushed privatization could be catastrophic for American homeowners and taxpayers alike.
Their argument is simple—and conservatives should pay attention. If Freddie and Fannie are hastily released from government oversight without proper safeguards, taxpayers could once again find themselves on the hook for massive bailouts. We’ve seen this movie before: private investors reap huge rewards when times are good, but when the housing market inevitably faces turbulence, it’s hardworking Americans who bear the losses. Pimco’s team rightly asks, “If the GSEs are released but the government remains accountable to come to their rescue, wouldn’t taxpayers ultimately be the biggest loser (once again) by seeing GSE gains privatized but losses socialized?”
The potential fallout doesn’t end there. Pimco also warns that privatization without explicit, clearly legislated government guarantees could spell higher mortgage rates for millions of Americans. The 30-year fixed-rate mortgage—a cornerstone of American homeownership and middle-class stability—could become drastically more expensive or even endangered entirely. This is no small concern: for decades, the 30-year mortgage has been the bedrock of the American Dream, enabling countless families to achieve homeownership and financial security.
Now, some on our side might argue that privatization aligns perfectly with conservative principles of limited government and free markets. Indeed, conservatives have long championed the dismantling of bloated bureaucracies and government overreach. But true conservatism also means prudence, caution, and respect for institutions that have proven successful. There’s wisdom in Pimco’s advice: “Don’t fix what’s not broken.”
Even Bill Pulte, Trump’s newly appointed director of the Federal Housing Finance Agency (FHFA), seems cautious about pulling the trigger too quickly. In a recent CNBC interview, Pulte expressed concern about fraud and inefficiency within Freddie and Fannie, yet when asked about privatization, he responded ambiguously with, “We’ll see.” Clearly, even the administration recognizes the complexity and potential pitfalls of such a drastic step.
It’s easy to understand why investors are excited. After all, speculators stand to reap enormous profits if Freddie and Fannie are privatized. But conservatives must think clearly and resist the allure of short-term gains that could end up undermining financial stability and harming taxpayers. We must protect the average American homeowner from becoming collateral damage in a speculative frenzy.
President Trump has rightly prioritized America’s economic revival, focusing on manufacturing, trade reform, and unleashing American energy. His policies have brought jobs home and revitalized our economy. But when it comes to housing finance, caution is warranted. The privatization of Freddie Mac and Fannie Mae must be handled with extreme care, ensuring that taxpayers are not left footing the bill for another bailout.
True America First policy means ensuring stability and prosperity for all Americans—not just speculators seeking quick profits. It’s time to heed Pimco’s warning and proceed with caution. Housing finance is too important to the American economy, and to American families, to gamble on a hasty and poorly executed privatization.
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