Tariffs and Mortgage Market (with Jonathan Ferro, Lisa Abramitz, Amarie Hordern)

Libby Cantrill discusses the new 10% tariffs as expected and relatively benign. She notes tariffs are sticky revenue for Treasury. On FHFA, she views Bill Pulte's move as temporary and sees it as a death knell for Fannie/Freddie IPO, which could be bullish for agency MBS.

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PIMCO 7.8
Asset Manager $2100.00B
Libby Cantrill 8.5

Tariffs and Mortgage Market (with Jonathan Ferro, Lisa Abramitz, Amarie Hordern)

yields

Cantrill views tariffs as expected and not disruptive, and sees Fannie/Freddie IPO off the table as stabilizing for mortgage yields. This suggests no strong directional move in yields near-term.

Asks about the new 10% tariffs on 60 trading partners and where this is going.

Amarie Hordern
Libby Cantrill

Tariffs were expected after Supreme Court struck down AIPA tariffs. Section 122 tariffs expire July 24. New rate is more benign than Liberation Day. Effective average tariff rate may be lower.

Tariffs are sticky revenue for Treasury, politically salient on both sides, likely to persist regardless of 2028 winner.
Asks how this affects trade deals with Switzerland, EU, and Xi summit.

Amarie Hordern
Libby Cantrill

Skeptical of trade deal pledges; investments haven't materialized. EU deal is pending.
Asks about Bill Pulte moving from FHFA to acting DNI and impact on mortgage market.

Lisa Abramitz
Libby Cantrill

Pulte's move is likely temporary (Vacancies Act limits to 210 days). This takes Fannie/Freddie IPO off the table, which PIMCO views as positive for mortgage yields.

Privatization would increase risk premium and mortgage rates. Clarifying conservatorship could actually decrease mortgage yields.
Asks about lobbying bills given administration's direct influence on markets.

Jonathan Ferro
Libby Cantrill

This administration is interventionist, using industrial policy like Democrats. Lobbyists are lining up. Fannie/Freddy buying agency MBS has been effective in lowering mortgage rates.

Iran war upset that, but question is whether buying will continue under new FHFA leadership.

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