Wall Street is considering the potential outcomes for Fannie Mae and Freddie Mac following a hint by Treasury Secretary Scott Bessent that the government's holdings in these entities could be incorporated into the proposed US sovereign wealth fund. Bill Ackman, a billionaire hedge fund manager, backed the idea of re-privatizing these government-sponsored entities, emphasizing the importance of respecting shareholders' interests. Stifel Financial Corp.'s CEO, Ronald Kruszewski, highlighted in the Financial Times that transferring the government's stakes in Fannie and Freddie could enhance the nation's financial stability and lead to a $1 trillion sovereign wealth fund by 2040. JPMorgan Chase & Co.'s mortgage bond strategists advised investors to cautiously consider this notion. The Federal Housing Finance Agency, responsible for overseeing Fannie and Freddie, did not provide any comment on this matter. These companies were established by Congress to facilitate home ownership by increasing mortgage accessibility. Although Fannie was privatized in 1968, the government's implicit support persisted, leading to substantial government stakes in both companies as part of a bailout during the financial crisis.