Key points
- Adriana Kugler did not provide reason for resignation
- Kugler was nominated by Joe Biden in 2023
- Trump ups the ante against Jerome Powell
- Powell’s term as Fed chair ends in May 2026
ISLAMABAD: The Federal Reserve announced Friday that governor Adriana Kugler will step down next week, opening up a spot on the central bank’s powerful board that President Donald Trump will be able to fill.
Kugler, who did not participate in the Fed’s policy meeting earlier this week, would have completed her term in January.
Instead, she will retire on August 8. She did not provide a reason for stepping down in her resignation letter, according to AP.
Federal Reserve governors vote on the central bank’s interest rate decisions and also on changes to bank regulations and other financial rules.
Kugler was nominated by former president Joe Biden in 2023.
Her term was due to end in January 2026, but her departure gives Trump the chance to appoint someone new to the Fed sooner than anticipated, shaping its leadership.
Trump “very happy”
Trump said he was “very happy” about the upcoming vacancy after Kugler submitted her letter of resignation to him.
The personnel shift comes as the Fed faces intensifying pressure under Trump, who has repeatedly criticised the central bank’s chief Jerome Powell for not lowering interest rates sooner.
Trump said Friday on social media that “Powell should resign” just as Kugler did.
The US president previously suggested that what he says is an overly costly renovation of the Fed’s headquarters could be a reason to oust Powell, before backing off the threat.
Powell’s term as Fed chair ends in May 2026.
Kugler did not attend the Fed’s two-day policy meeting this week due to a personal matter and did not vote on its decision.
In a mid-July speech, she made the case for holding rates at the current level for some time, citing inflationary pressures and relatively low unemployment levels, according to AFP.
“Honor of a lifetime”
“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System,” Kugler wrote in her resignation letter.
FOMC member Adriana Kugler resigns—effective August 08, 2025
Her exit gives Trump an early seat to fill, potentially reshaping Fed leadership
Prediction markets are giving Powell less than a 15% to resign in 2025
Big implications for Fed and markets $TLT pic.twitter.com/wsZtBg44Sk
— Zeff (@Zeff_Pena) August 1, 2025
Fed policymakers have approached further rate cuts with caution — since their last reduction in December — as they assess the impact of Trump’s wide-ranging and fluctuating tariffs on inflation.
They expect to have a better gauge of the duties’ effects after data from the summer months, given that tariffs take time to filter through the economy.
But Trump has pushed for interest rate reductions, and for the benchmark lending rate to be lowered by as much as three percentage points.
