Adriana Kugler has resigned early from the US Federal Reserve Board, effective August 8.
Her exit gives President Trump his first chance to influence Fed leadership before the 2026 chair transition.
Despite Trump’s claims, Kugler had not publicly opposed current Fed policy or Chair Jerome Powell.
In an unexpected move, Federal Reserve Governor Adriana Kugler submitted her resignation, effective August 8, nearly 17 months before the scheduled end of her term. Her early departure marks the first vacancy on the central bank’s board since Donald Trump returned to office, offering the president an opportunity to influence the future of US monetary policy ahead of the 2026 leadership transition.
Kugler, the first Hispanic economist to serve on the Fed’s Board of Governors, was appointed in 2023 and quickly became a symbol of the Biden administration’s push for more inclusive representation within economic policymaking circles. In her resignation letter, Kugler made no reference to policy disagreements or internal conflict, simply stating it had been ‘an honour of a lifetime’ to serve during a crucial time for inflation control and labour market recovery.
Yet her exit quickly became political fodder.
Within hours of the announcement, President Trump took to social media, using the resignation to bolster his ongoing rhetoric on Fed Chair Jerome Powell. In a Truth Social post, Trump wrote: “Too Late Powell should resign, just like Adriana Kugler. She knew he was doing the wrong thing.” He offered no evidence for this claim, and Kugler herself has never publicly criticised Powell or his interest rate strategy.
In fact, just two weeks ago, Kugler had backed holding rates steady ‘for some time,’ citing a balanced labour market and persistent inflation in goods. While she was absent from this week’s Federal Open Market Committee meeting, Fed officials said the absence was due to a personal matter, unrelated to policy.
Still, the timing of her exit comes as Trump and his economic advisers increasingly pressurise the Fed to lower interest rates, accusing it of stifling growth. Treasury Secretary Scott Bessent has hinted that the administration may use the vacancy to install someone closely aligned with Trump’s views, potentially grooming that person for the chair role once Powell’s term ends in May 2026.
Names under consideration reportedly include National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, current Governor Christopher Waller, and Bessent himself.
Kugler, meanwhile, plans to return to her academic role at Georgetown University, where she has long served as a professor of public policy and economics. Before her time at the Fed, she was the US representative at the World Bank and held key economic roles in the Obama administration.
Her departure marks the end of a chapter that brought new representation to the Fed’s leadership, and now sets the stage for a potential shift in the central bank’s direction under Trump’s watch.
