Boosted by hedge fund titan Bill Ackman's public endorsement, the Federal National Mortgage Association (Fannie Mae) and Freddie Mac (Freddie Mac) both recorded their largest single-day intraday gains since May 2025 on Monday, with the Federal National Mortgage Association surging 41% at one point and Freddie Mac climbing as much as 34%.

The direct catalyst for this rebound was Ackman's high-profile declaration on social media that the stocks of the two entities were "ridiculously cheap". However, the day's gains only partially recovered from months of deep declines; as of publication, both stocks are still down approximately 60% from their mid-September highs.

Market doubts about the Trump administration's plan to exit government conservatorship for these two entities continue to grow, and this core suppressing factor has not fundamentally changed.

Ackman's Call: A "10x Opportunity"

Ackman posted on X, stating that the Federal National Mortgage Association and Freddie Mac offer the "best asymmetric investment opportunity" and predicting "a potential tenfold return, likely to materialize in the short term".

The founder of Pershing Square Capital Management placed the current opportunity within a broader investment framework, noting that "a group of the highest quality companies in the world are trading at extremely cheap prices" and calling it "one of the best times to buy quality assets in years."

Ackman has previously actively lobbied the White House regarding the privatization and restructuring plan for the two entities, making his public statements a closely watched indicator of related policy progress.

Stocks Still Deep in the Doldrums, Policy Uncertainty Dominates Valuation

Despite the significant single-day gains, the stocks of the two entities remained approximately 60% below their mid-September highs after Monday's rally.

The prior sharp declines were primarily driven by a waning market confidence in the Trump administration's roadmap for reforming the two entities. Since the 2008 financial crisis, both entities have been under federal government conservatorship, and there were expectations that a new administration would accelerate their return to the private sector, which had previously pushed stock prices up considerably. However, as the timeline for policy implementation became more ambiguous, the previously accumulated premium was rapidly corrected.

For investors, the valuation trajectory of the Federal National Mortgage Association and Freddie Mac largely hinges on the pace and intensity of policy progress. While Ackman's public endorsement boosted market sentiment in the short term, whether it can alter policy-level uncertainty remains to be seen.