Deutsche Bank: Firing Powell wont save much on debt costs

Odaily News U.S. President Donald Trump last month cited the cost of the federal debt as a new reason to urge Powell to cut interest rates. But firing the Fed chairman and forcing him to lower rates will do little, a new analysis shows. Removing Powell would not change the Treasurys interest costs on its debt, Deutsche Banks chief U.S. economist Matthew Luzzetti and others wrote. Trump has repeatedly called for a 3 percentage point rate cut, saying it would save more than $1 trillion. But doing so would lower short-term Treasury yields but raise long-term yields, according to calculations by the Deutsche Bank team, due to concerns that a more compliant Fed would mean higher inflation. Specifically, if Trump fires Powell, the Treasury would save only $12 billion to $15 billion by 2027.