Fed Governor Kugler steps down, providing Trump with a nominee for the committee responsible for setting interest rates.
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Dr. Adriana Kugler, member of the Board of Governors of the Federal Reserve, speaks to The Economic Club of New York in New York City, U.S., June 5, 2025. Kylie Cooper | Reuters
Federal Reserve Governor Adriana Kugler announced Friday that she is stepping down from her role at the central bank, creating a significant vacancy as President Donald Trump seeks lower interest rates. In a letter addressed to Trump, Kugler, 55, did not specify her reasons for leaving, mentioning only that she will return to Georgetown University as a professor in the fall.
"It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System," Kugler wrote. "I am especially honored to have served during a critical time in achieving our dual mandate of bringing down prices and maintaining a strong and resilient labor market."
Kugler's term was scheduled to expire at the end of January 2026. A nominee from the Biden administration, she joined the Board of Governors in September 2023, filling the unexpired term of Lael Brainard, who moved on to serve as a Biden economic advisor. During her tenure as a governor, Kugler was a permanent voter on the rate-setting Federal Open Market Committee.
Her resignation allows for the appointment of a new nominee aligned with Trump’s perspective. Two of his previous appointees, Christopher Waller and Michelle Bowman, expressed disagreement at Wednesday’s meeting regarding the decision to hold the Fed's key rate steady, indicating a preference for a reduction. Kugler was absent for that vote.
Trump has claimed, though without evidence, that Kugler resigned due to a disagreement with Powell regarding interest rates, expressing satisfaction at the opening on the board. Recently, Kugler has generally supported a more cautious stance, advocating for holding rates steady until the effects of Trump's tariffs on inflation become clearer.
Fed Chair Jerome Powell acknowledged Kugler's contributions, stating, "She brought impressive experience and academic insights to her work on the Board." Trump has indicated that any potential nominees will undergo a litmus test, supporting only those who favor lower interest rates.
In addition to Kugler's departure, Powell's term concludes in May, although he may opt to remain as governor until 2028. Kugler's exit opens up the opportunity for Trump to nominate someone who shares his views on interest rates, potentially targeting a future appointment for Powell’s position. There have been discussions among Trump and his advisors about the concept of a "shadow chair," who would act as an independent voice on the board until Powell’s tenure ends.
