Bill Pulte Talks Fed Subpoena, Housing

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What prompted the Federal Reserve's grand jury subpoenas?

Annmarie Hordern 0:02
Bloomberg Audio Studios Podcasts, radio, news.
Jonathan Ferro 0:07
Turning back to the Federal Reserve, sources telling us, our colleagues here at Bloomberg, that a driving force behind the DOJ's decision to subpoena the central bank is the Federal Housing Finance Agency director, Bill Pulte. Director Pulte has been busy over the last week. Some purchases of MBS in focus as well. Director Pulte, welcome to the program, sir. You are cited in our story this morning. Just wanted to give the opportunity to respond to it. Bill, what was your role in the developments over the weekend? The DOJ is outside of my purview. This is out of my purview. I don't know anything about it. And I would defer you to the DOJ. Bill, you haven't been shy of sharing your thoughts on the Federal Reserve before, particularly over the last 12 months.
Jonathan Ferro 0:44
You thought that the chairman would ultimately resign. He's standing firm. Do you think this push against the Federal Reserve is actually leading to unintended consequences and leading this Fed to dig in?
Bill Pulte 0:55
My main focus, John, has been on reducing mortgage rates to the extent that we can do it and increasing housing affordability. President Trump announced a huge thing last week when he decided that he was going to ban institutions from buying homes. Basically, the concept is that people should be living in homes, not corporations. You know, we have a supply problem in this country, and obviously we're working on the demand side of things because in some cases, affordability has gotten so tough that people don't even want to buy a home because of what Joe Biden did. And so we're reversing that. That's what we're focused on. We had a huge one-two punch last week. You saw mortgage rates move 25 basis points lower on the news that Fannie and Freddie have started to undergo a $200 billion mortgage bond buy.
Bill Pulte 1:38
And I think you're going to see some very exciting things come out of Davos with regard to the president on housing in a week.
Lisa Abramowicz 1:45
Director Poldy, you were with the president this weekend, I believe, traveling with him on Air Force One from Washington to Palm Beach. Did you talk about the Federal Reserve with him this weekend?
Bill Pulte 1:54
Obviously, I would never talk about anything that the president and I talk about. I would say this, that the president is laser focused on housing affordability and reversing what has happened these last four years.

What role does Bill Pulte play in housing affordability?

Bill Pulte 2:06
You look at the average mortgage payment under Joe Biden. It's skyrocketed compared to what it was under President Trump's first term. We are focused on bringing down not only the mortgage rates, but also the day to day cost in upkeeping homes, which has to do with You know, whether it be your ongoing expenses, mortgage insurance, etc. There are so many pieces to the cost puzzle that at the FHFA, U.S. Federal Housing, we are working to reduce the cost burden that Americans have.
Lisa Abramowicz 2:35
I know that you've seen the report from our colleagues. I've also got calls last night about this subpoena handed to the Fed and was told that you were part of it, pulling together a report that then went to the DOJ. I just wanted to go a sense from you. Did the president know this was coming?

How does the DOJ's subpoena affect the Federal Reserve?

Lisa Abramowicz 2:51
The Treasury Secretary know this was coming? Have you had any of these conversations?
Bill Pulte 2:56
Again, on that matter, I'd refer you to the Department of Justice.
Lisa Abramowicz 2:59
Okay, well, we'll wait to hear from the Department of Justice. When it goes back to the mortgage-backed securities that you have been talking about, you've already been purchasing about north of $230 billion of them last year. There is a cap. Do you expect to reach that cap this year?
Bill Pulte 3:15
I think all options are on the table. President Trump is the president who keeps all options on the table. We announced this historic $200 billion buyback of mortgage bonds. This is a huge deal. And, you know, we'll keep all options on the table. Look, we're doing our part at Fannie and Freddie. Most presidents didn't even know Fannie and Freddie existed. Obviously, your community and Bloomberg and all of us in the private sector, we know the importance of Fannie and Freddie.

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