Goldman Sachs

Sept. 17 (UPI) — The Federal Reserve on Wednesday is expected to announce fresh rate cuts in the wake of U.S. President Donald Trump‘s demands to do so amid ongoing tariff worries and its impact on the American economy.

The central bank has not lowered interest rates since December and the Federal Open Market Committee is widely expected to lower rates by a quarter percent at its next meeting around 2 p.m EDT. It comes in an ongoing feud with White House that’s infuriated the president as the bank has been targeted by the Trump administration as it seeks to consolidate greater federal control under the executive branch.

On Monday, Trump’s newly appointed member to the Federal Reserve Stephen Miran was confirmed by the GOP-controlled Senate in a 48-47 vote.

It’s been suggested that Miran will dissent from the anticipated Fed decision as the administration seeks a higher rate reduction.

The Fed opted to take a “wait and see” approach on rates as the economy shifted under the aggressive economic and tariff policies implemented by Trump.

Trump for months has been vocally critical of Fed Char Jerome Powell and the independent board in his demands to lower interest rates as the president has recently attempted to illegally remove Fed Governor Lisa Cook from her role.

Powell did not give clear indications of the FOMC’s plan for Wednesday in a speech at the end of August to the annual Economic Policy Symposium in Jackson Hole, Wyoming.

On Monday, Trump said in a social media post in all caps the FOMC “must cut interest rates, now, and bigger than (Powell) had in mind.”

“In terms of the Fed’s dual-mandate goals, the labor market remains near maximum employment, and inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs,” Powell said in Wyoming.

“At the same time, the balance of risks appears to be shifting,” he said on August 22.

But a Goldman Sachs economist said Tuesday the “key question” for the September FOMC meeting was whether it will “signal that this is likely the first in a series of conservative cuts.”

“We expect the statement to acknowledge the softening in the labor market but do not expect a change to the policy guidance or a nod to an October cut. However, Chair Powell might hint softly in that direction in his press conference,” David Mericle wrote to CNBC in a note.

Meanwhile, a separate economist suggests that “such an emergency-sized move” that Trump envisions “is not justified by the current data.”

“Any decision to cut by 50 basis points at this stage would appear to be driven more by political pressure than economic necessity,” Seema Shah, chief global strategist at Principal Asset Management, told CNN.

Aug. 9 (UPI) — President Donald Trump reportedly wants the U.S. government to sell Fannie Mae and Freddie Mac stock in a quest to move the mortgage finance companies from full federal control.

The initial public offering, which would be possible the largest in history, was first reported by The Wall Street Journal and later confirmed by CNN and The New York Times.

The outlets reported that the plans have not been finalized for Fannie Mae, which is short for Federal National Mortgage Association, and was created in 1938 as part of President Frank Roosevelt’s New Deal. Freddie Mac, which stands for Federal Home Loan Mortgage Corp., began in 1970 to further expand the secondary mortgage market.

An IPO of up to 15% of Fannie Mae and Freddie Mac could raise $30 billion, according to the media outlets.

The New York Times reported that Trump met with executives from the nation’s largest banks — Jamie Dimon of JPMorgan, David Solomon of Goldman Sachs, Brian Moynihan of Bank of America and Jane Fraser of Citigroup. He asked them to come up with a way to sell shares on the stock market. The companies represent a big portion of the $12 trillion mortgage market.

Wall Street investors also met with Treasury officials, the New York Times reported.

Trump has wanted to privatize the companies since his first term in the White House.

“I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public. …. Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right,” he posted on Truth Social on May 22.

Federal Housing Finance Agency, which currently controls the two companies, has been headed since March by Bill Pulte, the grandson of the founder of PulteGroup, a residential and home construction company. He, too, has favored selling stock in the companies, but has said they should remain under the federal conservatorship.

With interest rates relatively high, CNN reported that some analysts fear the privatization would hurt the mortgage market. This could make it even more expensive to borrow money to buy a new home with high sale prices.

In 2024, Mark Zandi, the chief economist at Moody’s Analytics, estimated privatization would boost the average mortgage by an extra $1,800 to $2,800 each year.

Before the 2008 Great Recession, the companies were private and only backed by the U.S. Treasury, but were placed under what was planned as a temporary government conservatorship.

The market crash was caused as relaxed lending standards fueled banks giving subprime loans to people with poor credit who should not have qualified, and required a $187 billion government bailout to prevent lenders from filing for bankruptcy and a potential crash of the economy.

Fannie and Freddie buy mortgages from lenders and repackage them for investors in a way to keep mortgages more affordable, in addition to guaranteeing bond investors that they will help out if too many borrowers default.

The role has kept mortgage rates relatively low and stabilized the 30-year fixed mortgage, the national rate for which currently stands at around 6.58%.

Jaret Seiberg, a financial services and housing policy analyst at TD Cowen Financial, told CNN in May that the spinoff might not happen until late 2026 or early 2027.

The Treasury Department holds about 80% of the common stock and also has senior preferred shares. Investors Bill Ackman and John Paulson, who endorsed Trump for president, bought shares several years ago with the hope the government would sell stock, according to the Journal and the Times.