Federal Reserve Governor Adriana Kugler announced Friday she will step down from the Fed Board of Governors on August 8, clearing the way for President Trump to nominate her replacement months earlier than expected. Kugler, appointed by President Biden, was originally set to serve until January 31.
“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System,” Kugler wrote in her resignation letter to Fed Chair Jerome Powell. She cited the importance of helping the Fed meet its dual mandate of lowering inflation while maintaining a strong labor market. Kugler, who was absent from this week’s FOMC meeting due to a “personal matter,” will return to Georgetown University as a professor.
Kugler’s departure hands Trump a timely opening to potentially shape the future of the Fed. The White House is reportedly weighing candidates to succeed Powell as chair when his term ends next May—and may appoint one of those contenders to Kugler’s seat as a lead-in. Among those under consideration are National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, and Treasury Secretary Scott Bessent. Sitting Fed Governor Christopher Waller is also a top contender.
With Powell’s term as a board member running through 2028, Trump allies hope he voluntarily steps down when his chairmanship ends next year, opening up another seat. In the meantime, the administration continues to pressure the Fed to cut rates by up to 300 basis points. Trump, in a Friday social media post, urged the Fed Board to “ASSUME CONTROL” and “DO WHAT EVERYONE KNOWS HAS TO BE DONE.”
Following dovish dissents from Governors Waller and Michelle Bowman at this week’s FOMC meeting—where they called for a rate cut—the July jobs report further shifted the market’s expectations. After the weaker-than-anticipated numbers, traders boosted the probability of a September rate cut to 80%, up from less than 40% the day before.
Trump praised the dissents, posting: “STRONG DISSENTS ON FED BOARD. IT WILL ONLY GET STRONGER!” With seven presidentially appointed governors holding permanent voting seats on the FOMC, and regional Fed presidents rotating through five additional slots, the power to reshape monetary policy may hinge heavily on who fills Kugler’s soon-to-be-vacant seat.
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