Zürcher Nachrichten - US Fed governor to resign early at critical time for central bank

Kugler, who was nominated by former president Joe Biden in 2023, did not give a reason for stepping down from the Fed's board.

Her term was due to end in January 2026, but her departure -- effective August 8 -- gives Trump the chance to appoint someone new to the Fed sooner than anticipated, shaping its leadership.

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 criticized the central bank's chief Jerome Powell for not lowering interest rates sooner.

Trump has also 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.

"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.

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 urged for interest rate reductions, and for the benchmark lending rate to be lowered by as much as three percentage points.

Early Friday, Trump touted the fact that two Fed governors voted against the central bank's Wednesday decision to keep rates unchanged again.

He said on social media: "STRONG DISSENTS ON FED BOARD. IT WILL ONLY GET STRONGER!"

He also called Powell a "stubborn moron" and said the Fed's board should "assume control" if Powell continued to support holding rates steady.

Kugler is expected to return to Georgetown University as a professor this year, the Fed said Friday.

Y.Keller--NZN