1 00:00:02,560 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,760 --> 00:00:09,840 Speaker 2: Turning back to the Federal Reserve, sources telling us our 3 00:00:09,880 --> 00:00:12,960 Speaker 2: colleagues here at Bloomberg that a driving force behind the 4 00:00:13,080 --> 00:00:16,400 Speaker 2: DOJ's decision to subpoena the Central Bank is the Federal 5 00:00:16,440 --> 00:00:19,960 Speaker 2: Housing Finance Agency Director Bill Pulty. Director Pulty has been 6 00:00:19,960 --> 00:00:22,520 Speaker 2: busy over the last week, some purchases of MBS and 7 00:00:22,600 --> 00:00:25,000 Speaker 2: Focus as well. Director Pulty, Welcome to the program, Sir. 8 00:00:25,280 --> 00:00:27,240 Speaker 2: You are cited in our story this morning. Just wanted 9 00:00:27,280 --> 00:00:29,720 Speaker 2: to give the opportunity to respond to it. Bill, What 10 00:00:29,840 --> 00:00:32,159 Speaker 2: was your role in the developments over the weekend. 11 00:00:33,440 --> 00:00:35,960 Speaker 3: The DOJ's outside of my purview. This is out of 12 00:00:36,000 --> 00:00:38,000 Speaker 3: my purview. I don't know anything about it, and I 13 00:00:38,040 --> 00:00:39,320 Speaker 3: would refer you to the DOJ. 14 00:00:39,840 --> 00:00:41,880 Speaker 2: Bill, you haven't been shy of sharing your thoughts on 15 00:00:41,920 --> 00:00:44,720 Speaker 2: the Federal Reserve before, particularly over the last twelve months. 16 00:00:44,760 --> 00:00:48,680 Speaker 2: You thought that the chairman would ultimately resign. He's standing firm. 17 00:00:48,720 --> 00:00:51,040 Speaker 2: Do you think this push against the Federal Reserve is 18 00:00:51,040 --> 00:00:54,279 Speaker 2: actually leading to unintended consequences and leading this fed to 19 00:00:54,320 --> 00:00:54,720 Speaker 2: dig in. 20 00:00:55,800 --> 00:00:58,920 Speaker 3: My main focus, John has been on reducing mortgage rates 21 00:00:58,960 --> 00:01:01,000 Speaker 3: to the extent that we can do it. And increasing 22 00:01:01,000 --> 00:01:04,720 Speaker 3: housing affordability. President Trump announced a huge thing last week 23 00:01:04,920 --> 00:01:07,560 Speaker 3: when he decided that he was going to ban institutions 24 00:01:07,720 --> 00:01:11,400 Speaker 3: from buying homes. Basically, the concept is that people should 25 00:01:11,400 --> 00:01:13,920 Speaker 3: be living in homes, not corporations. You know, we have 26 00:01:13,959 --> 00:01:16,680 Speaker 3: a supply problem in this country, and obviously we're working 27 00:01:16,760 --> 00:01:19,200 Speaker 3: on the demand side of things, because in some cases, 28 00:01:19,319 --> 00:01:22,080 Speaker 3: affordability has gotten so tough that people don't even want 29 00:01:22,120 --> 00:01:24,039 Speaker 3: to buy a home because of what Joe Biden did, 30 00:01:24,240 --> 00:01:26,840 Speaker 3: and so we're reversing that. That's what we're focused on. 31 00:01:27,000 --> 00:01:28,800 Speaker 3: We had a huge one to two punch last week. 32 00:01:28,840 --> 00:01:32,119 Speaker 3: You saw mortgage rates moved twenty five bases points lower 33 00:01:32,319 --> 00:01:34,520 Speaker 3: on the news that Fanny and Freddie have started to 34 00:01:34,680 --> 00:01:38,920 Speaker 3: undergo a two hundred billion dollar mortgage bond buy. And 35 00:01:39,400 --> 00:01:41,080 Speaker 3: I think you're going to see some very exciting things 36 00:01:41,120 --> 00:01:43,880 Speaker 3: come out of Davos with regard to the President on housing. 37 00:01:44,080 --> 00:01:45,160 Speaker 1: In a couple in a week. 38 00:01:45,160 --> 00:01:47,720 Speaker 4: Grector POLDI, you were with the President this weekend, I believe, 39 00:01:47,760 --> 00:01:50,400 Speaker 4: traveling with him on Air Force one from Washington to 40 00:01:50,520 --> 00:01:52,880 Speaker 4: Palm Beach. Did you talk about the Federal Reserve with 41 00:01:52,920 --> 00:01:53,640 Speaker 4: him this weekend? 42 00:01:54,520 --> 00:01:56,920 Speaker 3: Obviously I would never talk about anything that the President 43 00:01:57,080 --> 00:01:59,120 Speaker 3: and I talk about. I would say this that the 44 00:01:59,160 --> 00:02:03,960 Speaker 3: President is late focused on housing affordability and reversing what 45 00:02:04,000 --> 00:02:05,720 Speaker 3: has happened these last four years. 46 00:02:06,040 --> 00:02:07,760 Speaker 1: You look at the average mortgage payment. 47 00:02:07,600 --> 00:02:10,720 Speaker 3: Under Joe Biden, it's skyrocketed compared to what it was 48 00:02:10,960 --> 00:02:14,000 Speaker 3: under President Trump's first term. We are focused on bringing 49 00:02:14,040 --> 00:02:17,639 Speaker 3: down not only the mortgage rates, but also the day 50 00:02:17,680 --> 00:02:21,040 Speaker 3: to day cost in upkeeping homes, which has to do 51 00:02:21,160 --> 00:02:25,720 Speaker 3: with you know, whether it be your ongoing expenses, mortgage insurance, etc. 52 00:02:26,000 --> 00:02:27,920 Speaker 1: There are so many pieces to the cost. 53 00:02:27,720 --> 00:02:31,079 Speaker 3: Puzzle that at the FHFA US Federal Housing we are 54 00:02:31,200 --> 00:02:34,520 Speaker 3: working to reduce the cost bird and that Americans have. 55 00:02:35,040 --> 00:02:37,079 Speaker 4: I know that you've seen the report from our colleagues. 56 00:02:37,120 --> 00:02:40,480 Speaker 4: I've also got calls last night about the subpoena handed 57 00:02:40,520 --> 00:02:43,120 Speaker 4: to the FED and was told that you were part 58 00:02:43,120 --> 00:02:45,400 Speaker 4: of it, pulling together a report that then went to 59 00:02:45,440 --> 00:02:48,240 Speaker 4: the DOJ. I just wanted to go since from you. 60 00:02:49,000 --> 00:02:50,760 Speaker 1: Did the President know this was coming? 61 00:02:51,040 --> 00:02:53,440 Speaker 4: The Treasury Secretary know this was coming? Have you had 62 00:02:53,480 --> 00:02:56,440 Speaker 4: any of these conversations again. 63 00:02:56,200 --> 00:02:58,840 Speaker 3: On that matter, I'd refer you to the Department of Justice. 64 00:02:59,000 --> 00:03:01,240 Speaker 4: Okay, well, we'll wait to your the Department of Justice. 65 00:03:01,320 --> 00:03:03,400 Speaker 4: When it goes back to the mortgage backed securities that 66 00:03:03,440 --> 00:03:07,440 Speaker 4: you have been talking about, you already been purchasing about 67 00:03:07,560 --> 00:03:10,040 Speaker 4: north of two hundred and thirty billion dollars of them 68 00:03:10,120 --> 00:03:13,120 Speaker 4: last year. There is a cap. Do you expect to 69 00:03:13,160 --> 00:03:14,480 Speaker 4: reach that cap this year? 70 00:03:15,360 --> 00:03:16,800 Speaker 1: I think all options are on the table. 71 00:03:16,840 --> 00:03:19,280 Speaker 3: President Trump is a president who keeps all options on 72 00:03:19,320 --> 00:03:22,400 Speaker 3: the table. We announced this historic two hundred billion dollars 73 00:03:22,400 --> 00:03:26,360 Speaker 3: buyback of mortgage bonds. This is a huge deal, and 74 00:03:26,520 --> 00:03:28,359 Speaker 3: you know, we'll keep all options on the table. Look, 75 00:03:28,360 --> 00:03:30,760 Speaker 3: we're doing our part of Fanny and Freddy. Most presidents 76 00:03:30,760 --> 00:03:33,760 Speaker 3: didn't even know Fanny and Freddie existed. Obviously, your community 77 00:03:33,760 --> 00:03:35,680 Speaker 3: in Bloomberg and all of us in the private sector 78 00:03:35,880 --> 00:03:37,920 Speaker 3: we know the importance of Fanny and Freddy. But for 79 00:03:37,960 --> 00:03:41,600 Speaker 3: the average day American, they don't understand because the presidents. 80 00:03:41,080 --> 00:03:42,680 Speaker 1: Haven't made it a priority. 81 00:03:42,960 --> 00:03:46,760 Speaker 3: Average Americans haven't understood that presidents had this authority until 82 00:03:46,760 --> 00:03:50,800 Speaker 3: President Trump found this authority, which is basically to utilize 83 00:03:50,800 --> 00:03:53,800 Speaker 3: these companies to be companies. Imagine that get people to 84 00:03:53,840 --> 00:03:55,760 Speaker 3: show up back to work. You know, we had sixteen 85 00:03:55,800 --> 00:03:58,880 Speaker 3: thousand people. We have sixteen thousand people at the two companies. 86 00:03:59,000 --> 00:04:01,240 Speaker 3: When I showed up on the scene and President Trump 87 00:04:01,240 --> 00:04:03,760 Speaker 3: came into office, they were all working from home. We'd 88 00:04:03,800 --> 00:04:07,200 Speaker 3: go to these big buildings, air conditioning, spewing everywhere, spending 89 00:04:07,200 --> 00:04:09,000 Speaker 3: fifty million dollars a year on leases. 90 00:04:09,160 --> 00:04:11,560 Speaker 1: Nobody was in these buildings. So we have turned around 91 00:04:11,600 --> 00:04:12,320 Speaker 1: Fanny and Freddy. 92 00:04:12,840 --> 00:04:14,960 Speaker 3: They try to get President Trump to sell the companies, 93 00:04:14,960 --> 00:04:18,040 Speaker 3: for the two companies together for one hundred billion dollars. 94 00:04:18,279 --> 00:04:20,560 Speaker 3: I think the valuation of the companies is anywhere between 95 00:04:20,600 --> 00:04:24,039 Speaker 3: five hundred billion and some say up to a trillion dollars. 96 00:04:24,480 --> 00:04:25,960 Speaker 5: A lot of people are hoping that there is some 97 00:04:25,960 --> 00:04:28,720 Speaker 5: sort of initial public offering o those companies. Are you 98 00:04:28,760 --> 00:04:31,080 Speaker 5: preparing them for that at some point later this year 99 00:04:31,160 --> 00:04:31,719 Speaker 5: or next year. 100 00:04:32,520 --> 00:04:34,760 Speaker 3: We are fully prepared to do whatever the President would 101 00:04:34,760 --> 00:04:35,880 Speaker 3: like us to do on that matter. 102 00:04:36,400 --> 00:04:37,760 Speaker 1: We have been getting prepared. 103 00:04:37,800 --> 00:04:40,520 Speaker 3: We are prepared, just like we are with the institutional 104 00:04:40,520 --> 00:04:43,279 Speaker 3: home buying ban, just like we are with home builders. 105 00:04:43,560 --> 00:04:45,800 Speaker 3: We have a full set of things to do, and 106 00:04:45,839 --> 00:04:48,000 Speaker 3: once the President decides what to do, we go about 107 00:04:48,040 --> 00:04:48,800 Speaker 3: executing them. 108 00:04:48,880 --> 00:04:50,920 Speaker 5: Director Pulti, a lot of people on Wall Street, we're 109 00:04:50,920 --> 00:04:54,200 Speaker 5: pretty excited actually about your purchases of MBS some mortgage 110 00:04:54,240 --> 00:04:56,479 Speaker 5: backed securities and saying that this shoulds like it should 111 00:04:56,520 --> 00:04:59,560 Speaker 5: be something that would bring down spreads. They were less 112 00:04:59,560 --> 00:05:02,080 Speaker 5: excited about the idea of preventing institutions from buying single 113 00:05:02,120 --> 00:05:06,039 Speaker 5: family homes, saying that it really do wasn't based in economics, 114 00:05:06,080 --> 00:05:09,440 Speaker 5: considering that in certain regions in the country there's actually 115 00:05:09,480 --> 00:05:12,320 Speaker 5: a glut of houses that this is not because of 116 00:05:12,400 --> 00:05:16,400 Speaker 5: institutions that account for a relatively small portion of overall buyers. 117 00:05:16,760 --> 00:05:18,000 Speaker 1: What do you say back. 118 00:05:17,880 --> 00:05:21,279 Speaker 5: About the economic fundamentals behind this type of proposal and 119 00:05:21,320 --> 00:05:23,200 Speaker 5: why it would bring down fordability and. 120 00:05:23,800 --> 00:05:25,920 Speaker 1: Increase the supply of houses. 121 00:05:25,520 --> 00:05:27,359 Speaker 5: Which is the ultimate issue that a lot of people. 122 00:05:27,240 --> 00:05:30,360 Speaker 3: Say, Well, it just makes economic sense. You talk about supply, 123 00:05:30,480 --> 00:05:31,920 Speaker 3: I mean, you kind of gave me a narrative there, 124 00:05:31,920 --> 00:05:33,839 Speaker 3: But if you look at the economic supply of things, 125 00:05:34,080 --> 00:05:37,120 Speaker 3: the fact is you have you know, big corporations buying 126 00:05:37,240 --> 00:05:40,279 Speaker 3: using long term paper, using their balance sheets to scoop 127 00:05:40,400 --> 00:05:43,040 Speaker 3: up homes in a supply shortage as we call it, 128 00:05:43,440 --> 00:05:46,040 Speaker 3: and they're in some cases buying these homes for twenty 129 00:05:46,120 --> 00:05:49,800 Speaker 3: thirty forty percent less than Americans are doing it. You know, 130 00:05:49,839 --> 00:05:53,000 Speaker 3: President Trump was elected with a very very popular mandate. 131 00:05:53,240 --> 00:05:55,000 Speaker 3: You know, sometimes people don't remember because it was a 132 00:05:55,040 --> 00:05:57,279 Speaker 3: year ago, but it was a landslide victory, and he 133 00:05:57,360 --> 00:05:59,840 Speaker 3: was given a mandate to reverse these last four years 134 00:05:59,839 --> 00:06:03,240 Speaker 3: of crazy inflation that happened under Joe Biden. And so 135 00:06:03,560 --> 00:06:05,760 Speaker 3: I think it's very appropriate that we're doing everything that 136 00:06:05,800 --> 00:06:08,000 Speaker 3: we can to reduce housing costs, and we're going to 137 00:06:08,040 --> 00:06:10,400 Speaker 3: keep doing it, whether it's the institutional ban on buying, 138 00:06:10,640 --> 00:06:13,120 Speaker 3: looking at all of the things that go into a 139 00:06:13,120 --> 00:06:16,080 Speaker 3: home and owning a home. Americans need to own homes 140 00:06:16,080 --> 00:06:18,279 Speaker 3: in this country, and we're committed to restoring that. 141 00:06:18,600 --> 00:06:20,800 Speaker 5: Director Poulty, did you study this in terms of this 142 00:06:20,880 --> 00:06:24,960 Speaker 5: apply demand dynamic and whether it actually would reduce the 143 00:06:25,000 --> 00:06:28,440 Speaker 5: cost of houses for individuals? Should there be a ban 144 00:06:28,640 --> 00:06:32,599 Speaker 5: on single family housing, on institutions buying single family homes? 145 00:06:32,600 --> 00:06:34,599 Speaker 5: Because a lot of people in the markets who have 146 00:06:34,720 --> 00:06:37,760 Speaker 5: supported President Trump's policies and thinking of Neil data in particular, 147 00:06:37,839 --> 00:06:40,039 Speaker 5: came out and said this is faulty economics. 148 00:06:40,880 --> 00:06:42,720 Speaker 3: Well, of course I've studied it. I've studied it my 149 00:06:42,760 --> 00:06:44,799 Speaker 3: whole life. I mean, I grew up in the housing business. 150 00:06:45,120 --> 00:06:46,560 Speaker 3: I grew up in the building business. I was on 151 00:06:46,600 --> 00:06:49,080 Speaker 3: the board of Poulty homes for four years. I understand 152 00:06:49,080 --> 00:06:52,080 Speaker 3: what institutional buying does. It's very powerful. I understand why 153 00:06:52,160 --> 00:06:54,240 Speaker 3: Wall Street might not like it. But we serve the 154 00:06:54,240 --> 00:06:56,880 Speaker 3: American people. We don't serve Wall Street. And President Trump 155 00:06:56,920 --> 00:06:59,159 Speaker 3: is laser focused on doing the right thing, no matter 156 00:06:59,160 --> 00:07:01,920 Speaker 3: who it affects in terms of their pocketbooks. At the 157 00:07:01,960 --> 00:07:05,760 Speaker 3: Wall Street level, he has focused, laser focused on action, 158 00:07:05,960 --> 00:07:08,440 Speaker 3: not talk like so many of these Democrats, like Elizabeth Warren. 159 00:07:08,600 --> 00:07:11,360 Speaker 3: You know, for years she would talk about all institutional buying. 160 00:07:11,400 --> 00:07:13,760 Speaker 3: She didn't do anything. Joe Biden didn't do anything about it. 161 00:07:13,920 --> 00:07:15,720 Speaker 3: President Trump is doing something about it. 162 00:07:16,080 --> 00:07:19,360 Speaker 4: Elizabeth Warren wanted to see an effort like this. Do 163 00:07:19,400 --> 00:07:21,640 Speaker 4: you think the President is taking cues from some of 164 00:07:21,680 --> 00:07:25,680 Speaker 4: the more populist wings of the Democratic Party. 165 00:07:26,480 --> 00:07:28,080 Speaker 3: No, I think Elizabeth Warren is going to have to 166 00:07:28,120 --> 00:07:30,280 Speaker 3: take cues from us or she's going to continue to 167 00:07:30,320 --> 00:07:32,640 Speaker 3: look like a fraud because she says all these things 168 00:07:32,640 --> 00:07:33,880 Speaker 3: and then she does nothing about it. 169 00:07:33,960 --> 00:07:36,120 Speaker 1: You know, President Trump, he gets things done. 170 00:07:36,240 --> 00:07:38,880 Speaker 3: He said, look, we're going to ban institutional buying, and 171 00:07:38,880 --> 00:07:41,520 Speaker 3: then we're going about both on an executive action front 172 00:07:41,680 --> 00:07:44,080 Speaker 3: as well as codifying it in legislation. I mean the 173 00:07:44,120 --> 00:07:46,400 Speaker 3: amount of momentum that we've had at the legislative level 174 00:07:46,440 --> 00:07:49,360 Speaker 3: from you know, different Congress people. I was at the 175 00:07:49,360 --> 00:07:51,120 Speaker 3: Financial Services Committee the other night. 176 00:07:51,240 --> 00:07:52,560 Speaker 1: People were ecstatic about this. 177 00:07:52,920 --> 00:07:55,720 Speaker 3: I also talked with multiple US Senators, many who are 178 00:07:55,800 --> 00:07:59,400 Speaker 3: vying to sponsor the legislation. So this is a very 179 00:07:59,400 --> 00:08:01,560 Speaker 3: big deal and I think it's going to happen. 180 00:08:01,840 --> 00:08:04,440 Speaker 4: Is the President going to declare a housing emergency in 181 00:08:04,480 --> 00:08:05,320 Speaker 4: the United States. 182 00:08:06,200 --> 00:08:08,520 Speaker 3: That's entirely up to the President. I can tell you this. 183 00:08:08,600 --> 00:08:11,240 Speaker 3: He is treating it with great urgency. He understands real 184 00:08:11,320 --> 00:08:13,960 Speaker 3: estate very well. He understands the importance of keeping home 185 00:08:14,040 --> 00:08:16,800 Speaker 3: prices up. He understands this issue very well. And we're 186 00:08:16,800 --> 00:08:20,840 Speaker 3: working very well together, Secretary Turner, Secretary Bessett, Secretary Lutnik, 187 00:08:21,080 --> 00:08:24,440 Speaker 3: the Vice President, Susie Wiles. This is an all hands effort, 188 00:08:24,640 --> 00:08:26,280 Speaker 3: James Blair in the White House. I mean, this is 189 00:08:26,320 --> 00:08:29,160 Speaker 3: an all hands effort to reduce the cost of home 190 00:08:29,200 --> 00:08:33,000 Speaker 3: ownership and get people, not corporations, back in homes. 191 00:08:33,160 --> 00:08:34,880 Speaker 2: We look forward to saying what comes in that effort. 192 00:08:34,920 --> 00:08:36,800 Speaker 2: I right to Poty, we appreciate your time this morning, 193 00:08:36,840 --> 00:08:39,080 Speaker 2: said thank you very much. The Federal Housing time right 194 00:08:39,160 --> 00:08:42,720 Speaker 2: to Bill POLTI are the federals kind of, but much 195 00:08:42,720 --> 00:08:45,240 Speaker 2: more on what's going to happen with housing in this country.