Trump acquires important vacancy as Kugler, Federal Reserve Governor, steps down
In a move that could potentially shift the direction of U.S. monetary policy, Adriana Kugler, the first Hispanic governor of the Federal Reserve, has announced her resignation, effective August 8, 2025. Her departure creates a vacancy on the Federal Reserve's Board of Governors, which President Donald Trump can now fill.
Kugler, who was appointed by President Biden in September 2023, has been a key member of the Federal Reserve, contributing to its decision-making process as part of the Federal Open Market Committee (FOMC). Her resignation leaves a significant gap, as the seven members of the board are responsible for setting interest rate policy.
President Trump has expressed frustration with current Fed Chair, Jerome Powell, and the Fed's interest rate decisions. Trump has signalled a desire to influence Fed policy through his appointments, preferring officials who favour cutting rates. However, as of the latest available information, no specific nominee or successor has been named by Trump to replace Kugler or to succeed Powell when his term ends in May 2026.
Interestingly, there is some precedent for a Fed chair remaining on the board after completing their term as chair. Marriner Eccles, who served as Fed chair in the 1930s, remained on the board after completing his term. It remains to be seen whether Jerome Powell will follow suit and continue his tenure on the board. Powell has declined to answer whether he will leave the board when he is done as chair.
Prior to joining the Fed, Kugler was a professor at Georgetown University and the U.S. representative to the World Bank. In her last speech as a Fed governor, Powell expressed support for keeping rates unchanged while monitoring the economy's response to Trump's tariffs.
Adriana Kugler did not provide a reason for her resignation in her letter. Her departure leaves a question mark over the direction of monetary policy in the coming years, as the Trump administration seeks to fill the vacant position on the Federal Reserve's Board of Governors.
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[5] Subscription-based IT Services for Policy-and-Legislation Monitoring may Gain Attention in the General News as the Trump Administration Seeks to Appoint a Suitable Candidate for the Fed Vacancy.
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