Federal Reserve Governor Adriana Kugler submitted her resignation Friday, creating a new vacancy on the central bank’s powerful board as tensions continue between Fed Chair Jerome Powell and President Donald Trump over interest rate policy.
Kugler, a former Biden administration appointee, plans to return to Georgetown University as a professor this fall. Her resignation is effective August 8.
“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System,” Kugler wrote in a resignation letter addressed to President 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.”
Kugler joined the seven-member board in September 2023 and was serving a term that was set to expire in January 2026. As a permanent voting member of the Federal Open Market Committee (FOMC), her departure gives President Trump an opportunity to nominate a new member who could potentially align more closely with his economic priorities.
Fed Chair Jerome Powell thanked Kugler for her service, stating, “She brought impressive experience and academic insights to her work on the Board.”
Ongoing Disagreements Over Rates
The resignation comes amid continued policy disagreements between President Trump and Powell, particularly on the direction of interest rates. Trump has called for rate cuts in light of recent economic data, including slowing job growth and easing inflation pressures.
In contrast, Powell and a majority of the FOMC have opted to hold rates steady, citing lingering concerns about inflation and broader economic uncertainty. The committee has now paused rate cuts for four consecutive meetings since December 2024.
During a recent visit to a new Federal Reserve facility, Trump publicly criticized Powell and questioned the project’s cost overruns. The president has made no secret of his dissatisfaction with the Fed’s decision-making in recent months.
Internal Division at the Fed
Not all members of the FOMC agree with Powell’s approach. Fed Governor Christopher Waller, also a Trump appointee, has publicly expressed support for cutting interest rates soon.
“I think we’re in the position that we could do this as early as July,” Waller said during a CNBC appearance in June. “Why do we want to wait until we actually see a crash before we start cutting rates?”
Waller’s remarks reflect a growing split within the central bank’s leadership as the U.S. economy shows signs of cooling. The July jobs report showed slower-than-expected hiring, and wage growth has moderated.
With Kugler’s departure, the administration will now weigh its options for a replacement. A new appointment could shift the balance of the Fed’s internal debate heading into the fall, when the next series of interest rate decisions are expected.
