Fannie, Freddie Boost Risk to Levels That Once Shook Wall Street

The mortgage giants Fannie Mae and Freddie Mac are increasing their exposure to interest-rate risk, mirroring levels that caused significant turmoil on Wall Street two decades ago. This surge in risk is tied to their rapidly expanding investment portfolios, which could have broader implications for financial stability if rates were to suddenly shift. Such a scenario underscores the ongoing vulnerabilities within the housing market and the financial system at large, prompting concerns among market watchers about potential future disruptions.