Final answer:
The Federal Housing Finance Agency (FHFA) is responsible for overseeing the operations of Fannie Mae and Freddie Mac during their government conservatorship.
Step-by-step explanation:
The federal entity overseeing the operations of Fannie Mae and Freddie Mac in government conservatorship is the Federal Housing Finance Agency (FHFA). Unlike bank holding companies, which are supervised by the Federal Reserve, Fannie Mae and Freddie Mac, as government-sponsored enterprises (GSEs), are under the conservatorship and regulatory supervision of the FHFA. This agency works to ensure that these institutions operate in a safe and sound manner, focusing on their critical role in the housing finance system of the United States. Even though the Federal Reserve has a hand in supervising financial institutions, the FHFA is specifically tasked with the oversight of Fannie Mae and Freddie Mac.