Deutsche Bank: If Powell is impeached, the 30-year US Treasury yield may surge 50 basis points.

Deutsche Bank strategists said that if U.S. President Donald Trump were to dismiss Federal Reserve Chairman Jerome Powell, the yield on U.S. 30-year Treasury bonds could soar by more than 50 basis points. In a report sent to clients by Matthew Raskin and Steven Zeng, they wrote that the most clear strategy to hedge the risks facing Fed independence - as well as the scenario of government spending overshadowing monetary policy - is to engage in steepening yield curve trades. These trades would benefit if the spread between short-term and long-term yields widens. Currently, the spread between U.S. 5-year and 30-year Treasury bonds is around 100 basis points, the steepest since 2021. "Firing Powell would be to facilitate looser monetary policy, which would raise inflation expectations and risk premiums," they wrote. "The implied changes are significant, but not unrealistic."