What comes next could reshape the Fed
The resignation of Federal Reserve governor Adriana Kugler Friday clears the way for president Donald Trump to name a new appointee to the central bank’s Board of Governors and potentially reshape the future of US monetary policy.
Kugler, 55, confirmed she would leave her post on August 8 to return to Georgetown University as a professor, stepping down nearly six months before her term was set to expire in January 2026.
In a letter to the president, she wrote, “It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System. I am especially honored to have served during a critical time in achieving our dual mandate of bringing down prices and keeping a strong and resilient labor market.”
Kugler, a Biden appointee confirmed in 2023, filled the unexpired term of Lael Brainard. Her role included a permanent vote on the Federal Open Market Committee, which sets interest rates. Her departure creates a pivotal opportunity for Trump, who has pushed aggressively for lower borrowing costs.
Trump: 'A woman left, as you know'
Speaking to reporters Sunday, Trump said, “I have a couple of people in mind. I’ll be announcing somebody for the filling of the person that left. A woman left, as you know, I guess a Biden or Obama appointment.”
The president also speculated, without evidence, that Kugler had resigned due to disagreements with Fed chair Jerome Powell over interest rates, CNBC News reported. “Very happy” about the new vacancy, Trump added that any nominee he selects will support rate cuts, which he has demanded repeatedly from the Fed.
Successor could be candidate for Fed chair
Trump is reportedly considering former Fed governor Kevin Warsh and current Council of Economic Advisors chair Kevin Hassett as Kugler’s potential replacement—both known for favoring lower interest rates, Yahoo Finance reported. Treasury secretary Scott Bessent, who is overseeing the search, has floated the idea of nominating someone now who could eventually replace Powell when his chairmanship ends in May 2026.
Warsh, who served on the Fed board from 2006 to 2011, has criticized the central bank recently, calling for “regime change” and a “strategic reset.” Hassett has also supported immediate rate cuts, aligning with the administration’s economic agenda.
Reshaping the Fed
With Powell’s future uncertain and Kugler’s early exit, Trump now has a rare opportunity to influence the composition of the Fed and push for monetary policy changes ahead of the 2026 election. Kugler’s departure, though not unusual in timing, comes as the administration intensifies its campaign to reduce interest rates by as much as 3 percentage points.
What are your thoughts on the speculation surrounding Kugler’s early exit? Share your insights in the comments below.
