Fed Chaos: Dumping Powell Could Cost U.S. Taxpayers $60 Billion Annually in Skyrocketing Debt Costs

Washington's favorite pastime—political theater—just got a $60 billion price tag. Ousting Jerome Powell as Fed Chair would hammer U.S. borrowing costs, adding nearly $60 billion to annual debt payments overnight.

Why? Markets hate uncertainty more than Congress hates balanced budgets. Powell's abrupt exit would trigger a confidence crisis—think Treasury yields spiking like a meme stock.

The kicker? Wall Street would make bank on the volatility while Main Street foots the bill. Some things never change—especially in the Fed's rigged casino.

$58 billion estimate covers only part of the picture

Goldberg added that long-term Treasury yields might climb by 20–50 basis points (with each basis point equal to 0.01%), edging 20‑ and 30‑year rates toward approximately 5.5%.

He calculated this uptick would amount to an additional $58 billion in annual interest on the roughly $276 billion of 30‑year and $168 billion of 20‑year securities the Treasury rolls out each year.

The estimate covers only 20 and 30 year bonds and does not include other maturities like 10 year notes, which could also see rates climb.

This projection assumes yield levels remain stable and that the government’s debt issuance strategy stays the same. “If interest rates jump, the debt burden could very quickly become unsustainable,” Goldberg warned.

Alex Everett, a fund manager at Aberdeen, suggested that in a span of two to three months, this shock could push 30‑year yields up by an entire percentage point, approaching 6%.

That scenario would represent the sharpest upswing in US bond yields since the early‑1980s Volcker period, when then‑Fed chair Paul Volcker aggressively raised rates to tame inflation. Everett pointed out that today’s rise would reflect market concerns over the Fed’s ability to curb inflation, rather than its success in doing so.

“[Markets will think] inflation will not be kept under control by an institution that exists to moderate the economy,” he said.

Firing Fed chair could trigger political and fiscal volatility

Removing a Fed chair could also spark wagers on heightened political instability and looser fiscal spending.

“It would be a very key progression point in Trump’s agenda; you’d assume the next logical step is that he can push harder on other things,” Mr Everett said.

He added that elevated Treasury yields would probably weigh on the dollar, inflicting losses on investors.

This increase would coincide with interest outlays, now about 3.2% of federal expenditures, expected to rise to roughly 6.1% by 2054, if Mr Trump’s budget proposals are adopted, according to the Committee for a Responsible Federal Budget.

At the same time, higher Treasury yields would push mortgage rates, already around 7%, even higher. This will slow down the housing market to its weakest in 30 years.

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