Trump's $200 billion bond-buying plan: a disguised QE injecting liquidity into the crypto market?

Under political pressure ahead of the midterm elections, U.S. President Trump recently made a high-profile announcement on social media regarding a $200 billion mortgage bond purchase plan. He directed Fannie Mae and Freddie Mac, two government-sponsored enterprises, to implement this plan with the goal of “driving down mortgage rates, reducing monthly payments, and making homeownership more affordable.”

01 Policy Core: “Housing Affordability” Action Under Election Pressure

By early 2026, rising housing costs in the U.S. had become a sharp political issue. Trump and his advisory team repeatedly warned that the cost of living could cause the Republican Party to lose control of Congress in the midterm elections.

Against this backdrop, Trump announced this policy via social media and explicitly politicized it, calling it “one of many measures to restore housing affordability, which the Biden administration has thoroughly undermined.”

The Director of the Federal Housing Finance Agency, Julia Gordon, later confirmed that Fannie Mae and Freddie Mac would carry out this directive by purchasing $200 billion worth of mortgage-backed securities (MBS).

A key background to this policy is a decision made during Trump’s first term. At that time, he chose not to sell Fannie Mae and Freddie Mac, allowing these two agencies to accumulate “$200 billion in cash,” providing the funding source for the current plan.

02 Market Mechanism: How It Affects Rates and the Overall Economy

The core mechanism of this bond purchase plan is to increase demand for mortgage-backed securities (MBS), compress their risk premiums, and thereby lower the underlying mortgage interest rates.

Simply put, when large buyers enter the market and buy these bonds in large quantities, bond prices rise, and the corresponding yields (interest rates) decline.

As government-sponsored enterprises, Fannie Mae and Freddie Mac play a critical role in the mortgage market. According to their existing agreements with the U.S. Treasury, each has a limit of $225 billion in mortgage investments.

As of November 2025, each held about $124 billion, leaving approximately $100 billion of purchasing capacity for each.

03 Market Response: Policy Effectiveness and Limitations

After the announcement, the market responded quickly. Mortgage-backed securities rebounded relative to U.S. Treasuries, and mortgage-related stocks, including Rocket Cos. Inc. and LoanDepot, Inc., also rose.

Analysts are divided on the policy’s effectiveness. David Dworkin, President and CEO of the National Housing Conference, believes it will “put downward pressure on mortgage rates—possibly at least 0.25 percentage points, or even more.”

Citi Group estimated late last year that if these two GSEs increased their portfolios by $250 billion, bond risk premiums could decrease by about 0.25 percentage points, transmitting to lower mortgage rates paid by consumers.

However, skeptical analysts point out that mortgage spreads have already narrowed, leaving limited policy space. Neil Dutta, Head of Economic Research at Renaissance Macro, said, “Most of the room seems to have been used up.”

Latest data from Freddie Mac shows that as of the week ending January 8, the average 30-year mortgage rate was 6.16%, approaching the lowest level since October 2024.

04 Crypto Market Correlation: When Traditional Financial Policies Meet Digital Assets

Trump’s policy moves often have a direct impact on the crypto market. This correlation became especially evident in 2025-2026.

Macro liquidity transmission: Some analysts describe Trump’s move as “personal QE” (quantitative easing), as its mechanism is similar to the bond-buying programs adopted by the Federal Reserve after the financial crisis.

If this plan indeed injects significant liquidity into the market, some funds may indirectly flow into the crypto market seeking higher returns.

Policy expectation shifts: The crypto market is highly sensitive to the policy directions of the Trump administration. Some analysts believe Trump may incorporate the cryptocurrency market into the “too big to fail” financial system by 2026.

If cryptocurrencies gain a status similar to traditional financial institutions, it would fundamentally change their market positioning and valuation logic.

Historical correlation patterns: Trump’s statements and policy declarations have repeatedly directly influenced crypto market prices. For example, when he proposed tariffs on certain imported goods, Bitcoin prices experienced notable volatility.

This sensitivity reflects the crypto market’s role as a macro risk appetite indicator.

05 Investment Perspective: Crypto Market Observation on the Gate Platform

Professional traders on the Gate platform have begun assessing the potential impact of this policy on the crypto market. The following are categories of crypto assets that may be affected:

Note: As of January 9, specific token prices on the Gate platform are continuously updated. Investors should check real-time quotes for the latest information. The crypto market’s high sensitivity to political dynamics means such policy announcements often cause short-term volatility, but long-term impacts require broader economic fundamental analysis.

06 Political Background: Policy Mix in the Election Cycle

This bond purchase plan is not an isolated action but part of the Trump administration’s housing policy toolkit. The day before announcing the bond purchase plan, Trump unveiled a plan to prohibit institutional investors from buying single-family homes.

Julia Gordon, Director of the Federal Housing Finance Agency, explicitly stated that these two policies are coordinated to jointly address housing affordability issues. Trump also said he plans to elaborate on more housing affordability proposals at the World Economic Forum in Davos later this month.

This policy also influences the future plans of Fannie Mae and Freddie Mac. Jaret Seiberg, Managing Director at TD Cowen, believes the bond purchase plan may mean that the IPO plans of these two companies have been put on hold.

Gordon revealed that Trump will decide within one or two months whether to proceed with their IPOs.

Future Outlook

The mortgage-backed securities (MBS) market has already responded to this policy, with bond risk premiums beginning to narrow, potentially reducing the 30-year mortgage rate by an additional 0.25 percentage points. The price fluctuations in the crypto market reflect a high sensitivity to Trump administration policies, where a simple social media post can trigger billions of dollars in reallocation.

This “covert QE” led by the White House not only concerns the U.S. housing market but could also trigger chain reactions within the global financial system. As boundaries between traditional financial markets become increasingly blurred, crypto assets are moving from the periphery to the center stage. Whether driven by political calculations or financial innovation, the redefining of digital assets’ financial attributes is underway.