Another 20% will go toward reducing the national debt. However, transparency concerns have emerged over the reported $55 billion in savings. Meanwhile, economic adviser Kevin Hassett confirmed that he is in ongoing discussions with Fed Chair Jerome Powell, though interest rate cuts are still unlikely in the near term. In trade policy, Howard Lutnick was confirmed as Commerce Secretary and is expected to play a key role in Trump’s tariff strategies. His ties to Tether have drawn scrutiny, but he is still very much a vocal supporter of Bitcoin and decentralization.
Trump Plans to Return Part of DOGE Savings
Donald Trump announced that he is considering a plan to return 20% of the savings generated by Elon Musk’s government cost-cutting initiative, the Department of Government Efficiency (DOGE), to American taxpayers. At a finance and technology summit in Miami hosted by Saudi Arabia’s sovereign wealth fund, Trump explained that another 20% of these savings could be allocated toward paying down the national debt, which is now more than $36 trillion.
DOGE claims that it saved approximately $55 billion by canceling government contracts and reducing the federal workforce. However, the accuracy of this figure has been questioned by many, as the department only provided a subset of the over 1,000 canceled contracts and leases it claims to have terminated.
Estimated DOGE savings (Source: DOGE)
Concerns about transparency are fueled by inconsistencies in the reported savings. The New York Times recently pointed out that one listed cancellation was originally stated as $8 billion when the actual contract was worth only $8 million. DOGE later clarified in a post on X that it always used the correct $8 million figure in its internal calculations.
Elon Musk reportedly pitched Trump on the idea of a tax reduction linked to DOGE’s cost-cutting measures. Based on the reported $55 billion in savings, if this amount were evenly distributed among the 163.1 million individual taxpayers who filed returns last year, each will receive less than $67.50. Additionally, the 20% of DOGE savings allocated to reducing the national debt, which is an estimated $11 billion, will cover just 1.3% of the $839.5 billion budget deficit the government accumulated since the fiscal year began in October.
During the same speech, Trump also addressed cryptocurrency policy and mentioned his recent executive order that he claims effectively ended what he described as "Joe Biden’s war on Bitcoin and crypto." The order established a crypto working group that is led by White House AI and crypto czar David Sacks. It is tasked with developing a legal framework for digital assets and stablecoins. It also includes an initiative to explore the potential creation of a national crypto stockpile.
Trump Adviser Holds Regular Talks with Fed
Kevin Hassett, the director of the National Economic Council and a key White House adviser to President Trump, revealed that he is holding regular meetings with Federal Reserve Chairman Jerome Powell. In a recent interview on CBS' Face The Nation, Hassett was asked whether these discussions were aimed at influencing interest rate decisions. He responded by stating that the Federal Reserve is independent, but pointed out that the president's opinions should still be heard.
Hassett stated that long-term interest rates have already declined since the Trump administration took office, and specifically pointed to a 40-basis-point drop in 10-year Treasury yields as a sign that the market expects inflation to decrease. Lower interest rates are typically bullish for cryptocurrencies and other risk-sensitive assets, as they provide market participants with easier access to capital, which can be used to invest in digital assets and businesses.
Despite Hassett’s comments, Federal Reserve Chairman Jerome Powell recently downplayed the likelihood of immediate rate cuts. While testifying before the Senate Banking Committee on Feb. 11, Powell stated that the Fed does not need to rush into lowering interest rates, which cast serious doubt on the possibility of rate reductions in 2025.
The cautious stance from the Fed was reinforced by the latest Consumer Price Index (CPI) report from the US Bureau of Labor Statistics, which showed that annual inflation reached 3% in January of 2025. This was slightly higher than expected. The report led to a market downturn, with Bitcoin falling below $95,000 as investors braced for a prolonged high-interest-rate environment.
Rate cut probabilities (Source: Chicago Mercantile Exchange)
Macroeconomic uncertainties, including persistent inflation, the risk of a trade war, and broader economic headwinds, also contributed to growing investor caution around risk-on assets like cryptocurrencies. The Chicago Mercantile Exchange’s FedWatch tool currently indicates that only 2% of market participants expect the Federal Reserve to cut interest rates by 25 basis points at its next meeting in March. This means that people are very cautious and skeptical about any potential monetary policy easing in the near term.
Howard Lutnick Confirmed as US Commerce Secretary
Howard Lutnick was recently confirmed as the 41st US Secretary of Commerce after a 52-45 Senate vote on Feb. 18. Lutnick stepped down as CEO of Cantor Fitzgerald immediately after his confirmation to take on his new role in President Donald Trump’s administration. He is expected to play a big role in shaping US trade policies, particularly in supporting Trump’s push for import taxes on key trading partners.
(Source: Congress.gov)
As Commerce Secretary, Lutnick will oversee a department of around 50,000 employees who are tasked with responsibilities ranging from business data collection and patent management to foreign investment promotion and weather forecasting. His influence will also extend to US trade negotiations, where he is set to help implement Trump’s tariff strategy.
The administration already imposed a 10% tariff on Chinese imports and increased taxes on foreign steel and aluminum. A 25% tariff on Canadian and Mexican imports is also still under consideration, with a final decision expected by early March. During his Senate confirmation hearing, Lutnick dismissed concerns that tariffs will lead to inflation, and called these arguments “nonsense.” Overall, it seems like he is very supportive of Trump’s broader trade policies.
Lutnick is a known advocate for cryptocurrency. Cantor Fitzgerald holds a stake in stablecoin issuer Tether and has been one of the company’s most crucial banking partners. Tether’s reserves were valued at $134 billion in November, but have since grown to over $141.7 billion, according to its website. Lutnick pledged to sell off shares in all 818 businesses and private investments he holds within 90 days, and set a deadline of May 19 to complete the divestment.
His connections to Tether and the broader crypto industry have drawn a lot of scrutiny, particularly from Senator Elizabeth Warren. She raised concerns about his close ties to the stablecoin giant and the access he will have to top Trump administration officials who are involved in regulating the sector. Despite this, Lutnick openly praised Bitcoin, due to aspects like its halving cycles and decentralized nature.
Lutnick’s confirmation fills the vacancy that was left by Gina Raimondo and is the start of a new phase in Trump’s second-term economic agenda.
