WASHINGTON: Federal Reserve Governor Adriana Kugler announced her resignation, effective August 8, cutting short her term originally set to end in January 2026. The move could reshape the Fed’s leadership succession as tensions between the central bank and President Donald Trump escalate.
Kugler, who joined the Fed in September 2023, will return to Georgetown University as a professor next autumn. She did not attend this week’s Federal Open Market Committee meeting, where interest rates were held steady.
Her early departure accelerates the timeline for replacing Fed Chair Jerome Powell, whose term expires next May. Trump has repeatedly criticized Powell, calling him “a stubborn MORON” and threatening to remove him over disagreements on interest rates.
The resignation gives Trump an opportunity to appoint a new governor who could influence monetary policy. Analysts speculate he may use the vacancy to position a future Fed chair. “She’s putting the ball in his court,“ said Derek Tang of LH Meyer, suggesting Kugler’s exit forces Trump to act on his rhetoric.
The White House has not commented, but Trump later expressed enthusiasm about filling the vacancy. The Senate must confirm any nominee, though Trump could bypass confirmation with a temporary recess appointment.
Kugler’s tenure coincided with aggressive rate hikes to combat inflation, drawing criticism from Trump. Despite progress toward the Fed’s 2% inflation target, tensions remain high. At this week’s meeting, two officials dissented, advocating rate cuts over concerns about job market risks.
Weaker-than-expected jobs data added fuel to the debate, prompting Trump to attack the Fed and fire the Labor Department’s statistics chief, alleging manipulated hiring figures. The move unsettled markets and raised concerns about data integrity.
In her resignation letter, Kugler emphasized her data-driven approach and commitment to public service. Her exit leaves the Fed navigating political pressure while balancing economic stability. - Reuters
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