Adriana Kugler, the most recent member of the Federal Reserve Board of Governors, announced her surprise resignation on Friday. This departure marks a major change in the leadership of the central bank. At 55 years old, Kugler has made the choice to go back to Georgetown University as a professor this fall. Her planned departure raises the prospect of President Donald Trump getting a chance to nominate a replacement for that committee that sets interest rates.
Kugler’s resignation is notable given that she missed a key vote a few weeks ago on whether the Fed would keep interest rates where they are. She has been someone who’s generally been hawkish in terms of raising interest rates. Until the effects of Trump’s tariffs on inflation were known, she supported holding the line on current rates. Her term was supposed to expire at the end of January 2026. She came on to the Board of Governors in September 2023 to fill the unexpired term of Lael Brainard, who departed to become an economic advisor to President Biden.
While Kugler didn’t explicitly state a reason for her resignation in her letter to President Trump, she has stayed quiet for long enough. Her move sends ripples through the world and invites perennial debates within the U.S. about monetary policy. This is especially timely, coming on the heels of the pandemic and economic crisis.
“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System.” – Adriana Kugler
Kugler’s four-year term will encompass her service as a full-voting member of the rate-setting Federal Open Market Committee. Her peers have honored her insights and expertise. In fact, even Fed Chair Jerome Powell has weighed in on her extremely positive impact on the Board.
“She brought impressive experience and academic insights to her work on the Board.” – Fed Chair Jerome Powell
As she prepares to return to academia, her resignation will lead to much speculation about who might replace her. These possible successors could shape the course of future monetary policy settings for years to come. The incoming nominee from President Trump will have an opportunity to shape the board’s stance on interest rates during a complex economic landscape.