According to data from Jinshi, last month U.S. President Trump used the cost of federal debt as a new reason to urge Powell to cut interest rates. However, analysis from Deutsche Bank shows that firing the Federal Reserve Chairman and forcing him to lower rates would be futile.
Matthew Luzzetti, Chief U.S. Economist at Deutsche Bank, and others pointed out that replacing Powell would not change the interest cost of the Treasury's debt. Trump called for a 3 percentage point cut in rates, claiming it could save over $1 trillion.
However, according to calculations by Deutsche Bank, although short-term Treasury yields have fallen, long-term Treasury yields have risen due to concerns that yielding to the Federal Reserve could lead to rising inflation. If Powell is fired, the Treasury could only save $12 billion to $15 billion by 2027.