Aug. 2 (UPI) — One of the seven members of the Federal Reserve Board of Governors, Adriana Kugler, announced she is stepping down next week, creating an opening for President Donald Trump to fill.
Her term was set to expire in January but Kugler said Friday she will depart in seven days. President Joe Biden appointed Kugler, a 55-year-old labor economist, in September 2023.
Governors’ terms are for 14 years, and Kugler filled an opening.
“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,” Kugler said in her resignation letter to Trump. “I am proud to have tackled this role with integrity, a strong commitment to serving the public, and with a data-driven approach strongly based on my expertise in labor markets and inflation.”
Kugler said she plans to return to teaching public policy at Georgetown University in the fall. She was a vice provost for faculty at Georgetown and earned her Ph.D. in economics at the University of California at Berkeley.
“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,” she wrote in the letter.
Kugler did not vote on Wednesday when the central bank’s Federal Open Market Committee kept the benchmark interest rate unchanged at a range of 4.25% to 4.5% for a fifth consecutive meeting. Two of the 11 committee members who did vote dissented, backing Trump’s desire to lower rates.
The 12-member committee includes the seven governors, the president of the Federal Reserve Bank of New York and four remaining 11 Reserve Bank presidents who serve one-year terms on a rotating basis.
“We just found out that I have an open spot on the Federal Reserve Board. I’m very happy about that,” Trump said late Friday before boarding Marine One.
He later posted on Truth Social that Fed Chairman Jerome Powell “should resign, just like Adriana Kugler, a Biden Appointee, resigned. She knew he was doing the wrong thing on Interest Rates. He should resign, also!”
The replacement may ultimately replace Powell, whose term ends in May, though he can remain as a governor until 2028.
The president appoints each of the board members and designates one to serve as chair for four years. Trump appointed Powell during his first presidency in 2018. Biden appointed him to another term as chairman.
“Trump’s influence on interest rates will now be felt earlier and more strongly,” Derek Tang, an economist at LHMeyer, an economic consulting firm, told The Washington Post.
Contenders to lead the Fed are National Economic Council Director Kevin Hassett, former Fed governor Kevin Warsh and Fed governor Christopher Waller, each with distinct strengths, The Washington Post reported. Trump has said he wants Scott Bessent to remain as Treasury secretary.
Trump has sought to replace Powell, calling him on Truth Social “a stubborn MORON” and “too late” on lowering interest rates. But he can only be fired “for cause,” such as malfeasance, neglect of duty or inefficiency, rather than disagreeing with policies.
Experts say his removal could disrupt the financial markets.
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