Deutsche Bank: Firing Powell will not save much debt costs.

Last month, President Trump cited the cost of federal debt as a new reason to urge Powell to lower interest rates. However, a new analysis shows that firing the Fed chairman and forcing him to lower rates will not help. Deutsche Bank's chief US economist, Matthew Luzzetti, and others wrote that replacing Powell would not change the Treasury Department's interest costs on debt. Trump has repeatedly called for a 3 percentage point rate cut, claiming it would save over $1 trillion. But according to calculations by the Deutsche Bank team, doing so would lower short-term bond yields but raise long-term bond yields, as people worry that a more compliant Fed would lead to rising inflation. Specifically, if Trump were to fire Powell, the Treasury Department would only save $12-15 billion by 2027.