Trump to appoint new Fed board member after governor Kugler announces resignation

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Federal Reserve governor Adriana Kugler is stepping down from the central bank's board, giving President Donald Trump the chance to appoint an early replacement amid his monthslong campaign to badger Fed officials into lowering interest rates.

The announcement comes just two days after the Fed said it would hold its key interest rate steady, despite mounting pressure from Trump to trim rates. Two Trump-appointed board members in favor of lower rates, Michelle Bowman and Christopher Waller, dissented from the decision. Kugler was absent from the vote. 

Kugler's resignation gives Trump an opportunity to at least partially shape the Fed's makeup to his liking ahead of her original departure date. Kugler, a Biden-appointed governor, joined the seven-member board in 2023 and was set to serve through January 2026. 

Kugler didn’t offer a reason for her Aug. 8 departure. A statement from the Fed said she would return to Georgetown University as a professor this fall. 

In a letter to President Donald Trump, Kugler said it has been the “honor of a lifetime” to serve on the Fed's board of governors. 

“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 said. “The Federal Reserve does important work to help foster a healthy economy and it has been a privilege to work towards that goal on behalf of all Americans for nearly two years.” 

In a July 30 note, Bill Adams, chief economist for Comerica Bank, noted that Trump may use Kugler's opening to appoint his pick for Fed Chair Jerome Powell's replacement.

Powell, who was appointed by Trump in 2017, will have his term as Fed chair end in May 2026. The president, who has recently backed away from threats to fire Powell, has made clear that he's unhappy with the Fed's decision to hold off on rate cuts. In June, Trump said he's hunting for a new Fed chair and has narrowed his search to “three or four people.”

Adams said Trump's next pick for chair could be a current Federal Open Market Committee member or an external hire.

"Perhaps the next Chair will have a different approach to monetary policy than Powell, but it’s hard to say—recall that Powell himself is a Trump appointee," Adams wrote on July 30, before Kugler announced her resignation. "In any case, the Fed seems likely to cut interest rates between now and when Powell’s term ends, which would make the transition feel less fraught."