Federal Reserve Board of Governors member Adriana D. Kugler has announced her resignation, stepping down during a particularly sensitive moment for the US central bank as President Donald Trump continues to challenge the long-standing tradition of Fed independence.
In a statement released Friday, the Fed said Kugler’s resignation will take effect on Aug. 8. While she did not provide a specific reason for her departure, the central bank noted she plans to return to her academic post at Georgetown University. Her term had been scheduled to end in January.
“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System,” Kugler said. “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’s departure is particularly significant given her role as a voting member of the Federal Open Market Committee (FOMC), the 12-member panel that sets US interest rates.
Just days before her resignation was announced, the FOMC wrapped up its July policy meeting with a decision to leave interest rates unchanged. In doing so, the central bank avoided sending a clear signal about when rate cuts would resume.
With Kugler’s departure, Trump now has the opportunity to appoint a replacement. The seven members of the Federal Reserve Board of Governors are nominated by the president and confirmed by the Senate.
Fed independence challenged in Trump era
Kugler’s resignation comes at a moment of heightened tension for the US central bank, as questions swirl around Fed Chair Jerome Powell’s future and Trump intensifies his attacks on the institution’s independence.
In recent months, Trump and his allies have renewed efforts to push Congress to remove Powell, accusing him of mismanaging monetary policy and saddling the federal government with billions in additional borrowing costs.
“We have a man who just refuses to lower the Fed rate,” Trump said of Powell in June, according to ABC News. “Maybe I should go to the Fed. Am I allowed to appoint myself?
On Thursday, Trump again took to Truth Social to criticize Powell, this time for the Fed’s decision to hold rates steady at its most recent policy meeting.
Trump’s repeated public interventions mark a break from a decades-long norm of central bank independence, in which the executive branch refrains from interfering in monetary policy decisions. He has called for historically large rate cuts to reduce federal interest payments and stimulate economic growth.
Fed policy decisions also continue to ripple through financial markets. Following a hotter-than-expected inflation report earlier this week and the Fed’s decision to hold rates steady, Bitcoin (BTC) saw a reversal, reflecting investor doubts over the timing and scale of potential rate cuts.
However, as Cointelegraph reported, expectations for rate cuts have rebounded in the wake of July’s weaker-than-anticipated nonfarm payrolls report.
