Fed Governor Kugler to Resign, Opening Spot for a Trump Pick

Federal Reserve Governor Adriana Kugler will step down from her position on the central bank’s board, the Fed announced Friday.

“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System,” Kugler said in a resignation letter to President Donald Trump. “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.”

In resigning, Kugler — whose governor term was not set to expire until January 2026 — presents Trump with a more immediate opportunity to select a nominee for her seat on the board. Trump and his allies have applied intense pressure on the Fed and Chair Jerome Powell to lower interest rates, which policymakers have declined to do so far this year. Kugler was not present for the Fed’s policy meeting earlier this week, where officials opted to hold interest rates steady for a fifth consecutive time.

The Fed said at the time that she missed the meeting for a “personal matter.” Her resignation letter did not specify why she was vacating her role.

Her decision to step down also comes as Trump and top administration officials ramp up their search for whom will replace Powell when his term leading the central bank ends in May 2026. Treasury Secretary Scott Bessent had suggested the administration might nominate someone to first fill Kugler’s seat and then later move to elevate that person to chair.

Kugler, who has served as a Fed governor since September 2023, became the first Hispanic policymaker to serve on the central bank’s Board of Governors. Her appointment fulfilled a years-long call from Democrats to improve diversity at the Fed by naming a Hispanic member.

Prior to joining the Fed, the Colombian-American economist was the US representative to the World Bank. She also served a stint as the chief economist at the Labor Department during President Barack Obama’s administration.

Her resignation will be effective Aug. 8, the Fed said. She will return to her position as a professor at Georgetown University.

(Updates with additional details.)

--With assistance from Jonnelle Marte.

To contact the reporter on this story:
Amara Omeokwe in Washington at aomeokwe@bloomberg.net

To contact the editors responsible for this story:
Christopher Condon at ccondon4@bloomberg.net

Reade Pickert

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