Labor & Employment Law Daily Wrap Up, ECONOMIC NEWS—Fed Governor to step down early, (Aug 5, 2025)

By Thomas Thompson

The Democratic-appointed Fed Governor Adriana Kugler submitted her resignation ahead of term’s expiration, providing an early opening for Trump to select a replacement.

On Friday, August 1, the Board of Governors for the Federal Reserve System announced that Adriana Kugler is stepping down from her position as a Fed Governor on Aug. 8, 2025. According to the announcement, she plans to return to Georgetown University where she is a full professor at the McCourt School of Public Policy and Economics.

Kugler’s early departure from the Fed provides Trump with the chance to nominate a replacement who more closely shares his views five months sooner. Her term was set to expire in January 2026. Kugler was nominated by President Biden on May 12, 2023, and confirmed by the U.S. Senate on Sept. 7, 2023. She was nominated to complete Lael Brainard’s term when she left to join the Biden White House that year.

In a letter to President Trump informing him of her departure Kugler wrote, “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.” As a Fed governor, Kugler was also a member of the interest rate-targeting Federal Open Market Committee (FOMC) In her most recent vote at the FOMC, in mid-June 2025, Kugler voted along with all other committee members to hold the target for the Fed Funds interest rate target steady at 4.25 to 4.5 percent. She shared the following insight to the Housing Partnership Network Symposium at about that time: “Overall, I see the labor market as stable and resilient, and economic activity moderating some. In contrast, I see upward pressure on inflation from trade policies, and I expect additional price increases later in the year.” She added, “I find it appropriate to hold our policy rate at the current level for some time.”

Kugler did not attend the most recent FOMC meeting on July 29-30, when the committee voted to maintain its current target. Two Trump-appointed governors, Michelle Bowman and Christopher Waller, broke with the majority of the FOMC and voted to lower the target rate by.25 percent.

Wishing her well, Federal Reserve Board Chair Jerome H. Powell "I appreciate Dr. Kugler's service on the Board and wish her very well in her future endeavors," adding, "She brought impressive experience and academic insights to her work on the Board."

The professor took a leave of absence from Georgetown to serve as the U.S. Executive Director of the World Bank for which she was nominated by President Biden in 2022.

Kugler, who earned her Ph.D. from the University of California at Berkeley in 1997, is the first Hispanic American to serve as a Fed governor.

News: EconomicNews PublicEmployees WhiteHouseNews