Is Freddie Mac Rebuilding Its Investment Portfolio?

A 19% annualized jump in Freddie Mac’s mortgage-related investment portfolio has raised red flags, but the general trend is still going in the right direction

Both Fannie Mae and Freddie Mac are gradually reducing their mortgage-related investment portfolios, so when Freddie Mac suddenly increased its portfolio by an annualized 19% last December it caught some people’s attention. So when Bloomberg’s Jody Shenn says that it sounds like a ‘high-flying hedge fund’ run by ‘Wall Street refugees,’ it sounds like a return to lax controls and risky deals from before the financial crisis. However, focusing on the long term trend instead of just one recent month tells a very different story.