This week, the Senate Banking Committee voted to advance Rep. Mel Watt's, D-N.C., nomination to head the Federal Housing Finance Agency out of committee on a straight party-line vote.
While Watt’s nomination advanced out of committee on a 12-to-10 vote, the veteran congressman has a long uphill battle ahead.
Many market experts and even policymakers remain pessimistic regarding Watt’s prospects to be confirmed.
The main reason? Republican opposition.
As expected, none of the committee’s Republicans voted in favor of Watt’s nomination.
Sen. Mike Crapo, R-ID, has not held his tongue on his concerns over Watt’s nomination confirmation, stating that the position of FHFA director "is like no other in our government" and he was disappointed in the White House for not selecting a nominee with a more fundamental understanding of the mortgage finance system.
Additionally, analysts for Compass Point tell the market to remain calm, noting the real challenge for the congressman will be on the Senate floor.
"Senate Majority Leader Reid (D-NV) is now the person to watch because he will decide how quickly to bring Sen. Watt’s nomination to the floor for consideration," explained Isaac Boltansky of Compass Point.
He added, "The question at the moment is whether Sen. Reid moves quickly to bring Rep. Watt’s nomination to the floor in advance of the August recess — which would put the recent nominations détente to the test — or if he only brings the five noncontroversial nominees to the floor."
Bottom line: The chances that Watt will be confirmed as FHFA director are a one-in-three chance, according to Compass Point.
With that in mind — for now — it looks like current acting director of the FHFA Ed DeMarco isn’t going anywhere just yet.