Fed Governor Kugler Resigns

Federal Reserve Governor Adriana Kugler announced Friday she is stepping down from her role at the central bank, creating an important vacancy at a time when President Donald Trump is pushing for lower interest rates.

In a letter addressed to Trump, Kugler, 55, did not state a reason for her decision to leave, only noting that she will be returning 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 keeping a strong and resilient labor market.”

Kugler’s term was set to expire at the end of January 2026. A Biden nominee, she joined the Board of Governors in September 2023, filling the unexpired term of Lael Brainard, who left to serve as a Biden economic advisor. As a governor, Kugler was a permanent voter on the rate-setting Federal Open Market Committee.

Her resignation now paves the way for Trump to put his own nominee in for the board. Two of his prior appointments, Christopher Waller and Michelle Bowman, voted against the decision at Wednesday’s meeting to hold the Fed’s key rate steady, instead indicating they wanted to lower. Kugler was absent for the vote.

Trump alleged without proof that Kugler resigned over a disagreement with Powell on interest rates. Trump added that he was “very happy” about having a Fed vacancy to fill.

Kugler of late has expressed generally hawkish views, with support for holding rates steady until the impact Trump’s tariffs are having on inflation becomes clearer.

Fed Chair Jerome Powell wished Kugler well, saying “She brought impressive experience and academic insights to her work on the Board.”

Trump has said he would litmus test any potential nominees and would only support those in favor of lower interest rates.

In addition to Kugler’s departure, Powell’s term ends in May, though he could choose to stay on as governor into 2028.

Regardless, Kugler leaving would allow Trump to get someone who shares his views on rates and who might be targeted to fill Powell’s seat. The president and some of his advisors have toyed with the idea of a “shadow chair” who essentially could act as a gadfly on the board until Powell leaves.