Deutsche Bank: Firing Powell won't save much on debt costs

Odaily Planet Daily News - U.S. President Trump cited the cost of federal debt as a new reason to urge Powell to cut interest rates last month. But a new analysis shows that firing the Fed chairman and forcing him to lower interest rates will not help. Deutsche Bank's chief U.S. economist Matthew Luzzetti and others wrote that replacing Powell will not change the Treasury's debt interest costs. Trump has repeatedly called for a 3 percentage point rate cut, saying it would save more than $1 trillion. But according to calculations by the Deutsche Bank team, while short-term Treasury yields have fallen, long-term Treasury yields have risen, due to concerns that a more compliant Fed will mean higher inflation. Specifically, if Trump fires Powell, the Treasury can only save $12 billion to $15 billion by 2027.