Fed Governor Adriana Kugler Resigns, Opening Door for Trump to Influence Interest Rate Policy
August 1, 2025 — U.S. monetary policy faces change as Fed Governor Adriana Kugler announced her resignation on Friday. Her exit opens a seat on the Fed’s Board of Governors and on the Federal Open Market Committee (FOMC), which sets the nation’s interest rates.
Key Details of Kugler’s Departure
- Resignation Announcement: Kugler, 55, sent a letter to President Donald Trump stating she will return to Georgetown University as a professor this fall.
- Term and Tenure: Her term was to end in January 2026. She was chosen in September 2023 by a Biden administration, filling the seat left by Lael Brainard.
- Role on FOMC: As a Governor, Kugler held a voting seat on the FOMC. She took part in votes to decide monetary policy, such as changing interest rates.
Implications for Federal Reserve Policy
Kugler’s exit leaves a gap that President Trump may fill with a nominee who backs lower interest rates. Trump showed his support for this change and hinted he would pick someone who shares his views on monetary policy.
- Trump’s Influence: Two Trump appointees, Christopher Waller and Michelle Bowman, recently opposed the decision to keep the Fed’s benchmark rate. They called for a rate cut. Kugler did not vote on this matter.
- Allegations on Resignation: Trump said—with no proof—that Kugler left because she clashed with Fed Chair Jerome Powell over interest rate plans.
- Kugler’s Policy Views: Known for her hawkish stance, Kugler favored holding rates steady until clear signals of inflation changes appeared, amid the effects of tariffs.
Comments from Federal Reserve Chair Powell
Fed Chair Jerome Powell thanked Kugler for her service. He noted her long experience and useful academic views during her term. Powell’s term ends in May 2026, though he might stay on the board afterward.
Wider Context and Future Outlook
- The open seat gives President Trump more say over the Fed during a time when economic worries about inflation and growth are strong.
- Trump said he prefers nominees who support cuts in interest rates. He also mentioned the idea of a "shadow chair" who could speak up on the board until Powell leaves.
- Markets will watch closely because the Fed’s decisions about rates affect borrowing, investment, and the stability of the economy.
Adriana Kugler’s resignation marks an important moment for U.S. economic policy. It gives the Trump administration a chance to guide the future of interest rate policy during a challenging economic period.