Adriana Kugler, a Federal Reserve governor, is stepping down from her position on August 8. Kugler, who joined the Fed in September 2023, was expected to serve until January 31, 2026.
What Happened: The Fed announced Kugler’s resignation, stating she will return to Georgetown University as a professor next autumn, according to a Reuters report.
Her early departure could impact the already complex succession process for Fed leadership, amid tense relations with President Donald Trump.
Kugler did not attend the recent Federal Open Market Committee meeting. Her exit may alter the timeline for the succession of Chair Jerome Powell, whose term concludes next May. Trump has frequently expressed dissatisfaction with Powell, believing interest rates should be significantly lower.
Trump now has the opportunity to appoint a new Fed governor to complete Kugler’s term. Speculation suggests he might choose a potential future chair for the position. The White House has not commented on the appointment, but Trump expressed satisfaction with the vacancy.
See Also: Fed Skips Rate Cut Again—But Reveals Something We Haven’t Seen Since 1993
Analyst Derek Tang from LH Meyer remarked, “I would not read any political motivation into what [Kugler is] doing, although the consequence of what she’s doing is she’s calling Trump’s bluff.” The process of filling the governor’s role involves several complexities, including the possibility of a temporary recess appointment by Trump.
Why It Matters: Kugler’s resignation comes amid ongoing tensions between President Trump and Fed Chair Jerome Powell. Trump has been vocal about his desire for lower interest rates, even visiting the Fed headquarters to press Powell for cuts. Despite his criticisms, the Supreme Court has shielded Powell from being fired by Trump.
In July, the Fed maintained its interest rates, resisting Trump’s demands for cuts. This decision was seen as Powell being more hawkish than anticipated, according to economists.
Kugler had earlier shown support for rate cuts if inflation declined, aligning with the Fed’s dual mandate of price stability and employment growth.
With Kugler’s departure, Trump has the chance to influence the Fed’s direction by appointing a new governor, potentially impacting future monetary policy and the leadership succession at the Fed.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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