WSJ What’s News - Are Fannie Mae and Freddie Mac Set for an IPO?

Episode Date: August 8, 2025

P.M. Edition for Aug. 8. In an exclusive, we’re reporting that the Trump administration is preparing an IPO for mortgage giants Fannie Mae and Freddie Mac later this year, which it estimates could raise $30 billion. But WSJ capital markets reporter Corrie Driebusch says that key questions remain—including whether the companies will remain under government conservatorship. Plus, gold futures briefly surpassed a 45-year record before paring gains after the White House said it would clarify tariffs on gold. And nicotine is in, beer is out: What Americans’ changing vices mean for the companies behind the goods, and their stock prices. WSJ reporter Laura Cooper discusses how the companies are responding. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The Trump administration is preparing an IPO from mortgage giants Fannie Mae and Freddie Mac. Trump allies began laying the groundwork for this, even before he was elected president last year. This has been a goal of Trump since his last administration. Plus, a day of turmoil in the gold market. And what Americans' guilty pleasures mean for business? It's Friday, August 8th. I'm Alex Oscella for the Wall Street. Journal. This is the PM edition of What's News, the top headlines and business stories that

move the world today. We're exclusively reporting that the Trump administration is preparing to sell stock in mortgage giants Fannie Mae and Freddie Mac, in an offering it believes could raise around $30 billion. The IPO would kick off later this year. That's according to people familiar with the matter. A small number of shares of the two mortgage giants already trade on the over-the-counter market. Corey Dreebush covers capital markets for the journal and joins me now. Corey, what do we know about this plan as it stands? What we know is that Trump allies began laying the groundwork for this even before he was elected president last year. And it would value the Fannie Mae and Freddie Mac at roughly

$500 billion or more. And the government would try to sell between 5% and 15% of the stock. Given that these mortgage giants are under government conservatorship and happen since 2008, where would the money raised actually go? Right now, proponents of such a transaction, which would be one of the largest stock offerings in history, the plan would be to potentially reduce the country's deficit and return money to taxpayers. That is what we are hearing. Obviously, things are still early on. A lot of things could change. There's a lot of moving parts. You mentioned that this is a priority for the Trump administration, but why do this now? Ever since 2008, when Fannie Mae and Freddie Macro brought a conservatorship, it feels like there's been chatter about how do we get them out of conservatorship or how do we privatize. These discussions are happening.

The six large banks, their CEOs have all gone down to D.C. have met with President Trump. They've also met with the Secretary of Commerce, the Secretary of Treasury, and the head of the Federal Housing Finance Agency, the FHFA. They've also been meeting with the CEOs and bankers. So this is a serious attempt. However, there's no guarantee a deal will come together. IPOs obviously take time to prepare, and this is really complicated. Previous attempts to privatize have failed to gain traction a lot because Fannie and Freddie have long benefited from the market expectation that the government would bail them out of trouble. And that's known as this so-called implicit guarantee. The president has said he wants

Fannie Mae and Freddie Mac to keep the guarantee in case of a public offering. But he hasn't been clear exactly on how that would work. Separately, the head of the FHFA in the past has suggested that Fannie and Freddie could remain under conservatorship, even while conducting an IPO of their shares, but that also hasn't been clarified exactly how that will work. That was WSJ reporter, Corey Dreybush. Thank you, Corey. Thanks. In a separate development, President Trump has removed former Congressman Billy Long as the Commissioner of the Internal Revenue Service.

That's according to a senior White House official, who said that Long is being replaced on an interim basis by Treasury Secretary Scott Bessent. It was a day of turmoil in the gold market. with futures giving up almost all their daily gains after the White House said it would clarify tariffs on the precious metal. Gold Futures had been on track to eclipse their inflation-adjusted record set 45 years ago, after it emerged the U.S. had imposed levies on Swiss gold bars. Gold prices have risen for five of the past six days, boosted in part by hopes the Federal Reserve will soon cut interest rates in response to weakening economic data. Futures prices in New York had briefly traded near $3,500 a Troy ounce,

today before retreating. This afternoon, a White House official said that President Trump will soon issue an executive order clarifying which tariffs apply to imports of gold bars. U.S. stocks rose today, ending a week heavy on tariff updates, but light on market turbulence. The Dow rose about half a percent. The NASDAQ hit its 18th record close of the year, gaining about 1 percent, and the S&P 500 finished the day just shy of a record. Adding about 0.8%. Residents have been forced from their homes in Southern California as raging wildfires exploded in size

and threatened thousands of properties and other structures in the region. The canyon fire, which was straddling the Ventura-Loss Angeles County line just west of the city of Santa Clarita, had grown to nearly 5,000 acres today. According to the Ventura County Fire Department, firefighters have about 25% of the blaze contained. A fire department spokesman said that dry conditions, 100-degree temperatures, and a rugged topography contributed to the fast spread of the fire. The Ventura County Fire Department said that more than 2,500 residents and thousands of structures were under mandatory evacuation orders,

while an additional 14,000 people were affected by evacuation warnings. President Trump has directed the Pentagon to prepare options to use military force, force against Latin American drug cartels. That's according to a senior U.S. official, who said that the options under discussion are focused on special forces operations, intelligence support, and precision targeting. Any military action would be coordinated with Mexico and other foreign partners. Since returning to office this year, Trump has made a priority of dismantling cartels and stopping illicit drugs, including fentanyl, from entering the U.S. Earlier this year, the White House designated certain Latin American-based criminal organizations as foreign terrorist organizations.

A White House spokeswoman said that, quote, President Trump's top priority is protecting the homeland. Coming up, nicotine is hot, but beer is not. What Americans' favorite vices mean for businesses and their stock prices. More after the break. No frills, delivers. Get groceries delivered to your door from No Frills with PC Express. Shop online and get $15 in PC optimum points on your first five orders. Shop now at nofrills.ca.

If you want to know what guilty pleasures are gaining and losing popularity in America, look at the stock prices for the makers of beer and cigarettes. For more, I'm joined by WSJ reporter, Laura Cooper. Laura, let's start with nicotine. Smoking generally is less popular now than it used to be, but shares of Marlboro Maker Altria are up more than 21 percent so far this year. What are they doing? What's going on with this? So it's no secret that Americans are smoking less. And all the formerly called tobacco companies, now I call them nicotine companies are looking for new engines of growth. So companies like

Altria that traditionally were making cigarettes are now looking to make these nicotine patches. They kind of look like tiny tea bags that sit in your mouth between the gum and the cheek, and they're very popular. Okay, nicotine is up, but it seems like beer is down. Shares of Molson Coors, the brewer behind beer brands like Miller Light and Blue Moon, are down more than 13% this year. How was the company responding to that? So beers had a hard time for quite some time. That has a lot to do with younger generations choosing like cannabis or THC drinks and then also GLP1s, curbing an appetite for people that have a beer on a Friday. And it's been hard for everyone. Moulson

Coors is one of the companies that has been hit by this, and they've been pretty open about that. They're moving into having non-alcoholic offerings, including energy drinks and fever tree, for instance, but they continue to push their beer offerings as well. So it becomes, is this a cyclical or a secular trend in beer? And no one can answer that question yet. Recently, we've talked a lot on the show about how consumers are tightening their belts. They're finding different and more creative ways to save some money. What does that mean for these companies? So for beer companies, they're seeing people buy single cans of beer instead of packs of beer.

So it's pack size shifting and trying to figure out how to reach your consumers. All beer companies have also noted that lower income consumers and Hispanic consumers have pulled back. For cigarettes, it's interesting. So both British American tobacco, which make Newports and Camels, and Altria, which obviously makes Marlborough, both are positioning different brands to people who are value-conscious. So everybody's trying to find a low-priced option while not degrading their brand. That was WSJ reporter, Laura Cooper. Thank you, Laura.

Thanks so much, Alex. With many of President Trump's tariffs now in effect, a number of companies are finding themselves looking to shift their supply chains in order to avoid higher costs. For many, that means trying to shift production out of China, which starting next week will be subject to a 30% tariff. In this regard, Apple has long been ahead of the game. Starting in 2017, the company began producing some of its iPhones in India. The country's iPhone production capacity is expected to more than double in the next two years.

But as WSJ South Asia Bureau Chief Trip Diahiri told our tech news briefing podcast, India still has a ways to go before catching up with China. It's a very big gap still, just in terms of different kinds of manufacturing know-how, precision manufacturing. China just has had a huge head start. And even at the time that the iPhone was invented, background 2007, China already had a pretty robust manufacturing ecosystem, which India is now starting to put in place. So there's a huge difference in capabilities. That said, India has really been trying to speed up Just the volume of iPhones being assembled here is bigger than in the past, and they are trying

in different states where this manufacturing happens to really look at, okay, what's next? What's a part that goes into the iPhone that I could reasonably expect to produce, given my know-how now? And they're trying to go after that. There may be some estimates would say 15 to 20 years away from where China is today, and I'm talking just about the supply chain. But they're definitely trying to work very hard on it in a really concerted way. But it's difficult to say where exactly things go and a lot could depend on how these tariffs and trade war wins shift.

To hear more from Tripti, listen to today's episode of Tech News Briefing. And that's What's News for this week. Tomorrow you can look out for our weekly markets wrap-up, What's News and Markets. Then on Sunday, we'll be discussing the surge in cyber attacks, how they affect small businesses and what they mean for the greater economy. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. morning. Today's show is produced by Pierre Bienname, with supervising producer Michael Cosmedes. Michael Laval wrote our theme music. Isha Al-Muslim is our development producer. Scott Salloway and

Chris Zinsley are our deputy editors. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osala. Thanks for listening.