As predicted, per the Tax Cuts and Jobs Act, the GSEs’ fourth-quarter earnings took a big hit with Fannie Mae and Freddie Mac posting losses of $6.5 billion and $2.9 billion, respectively. This is a far cry from their combined net income of $7.7 billion in the third quarter. But this likely one-time event was prompted by the GSEs having to reduce the value of their deferred tax assets by $15.3 billion after the tax act became law in December 2017. As a result, Fannie will need a $3.7 billion draw from Treasury and Freddie will have to request a $312 million draw.