As is well known, the Fed announced its interest rate decision for July last week. In line with expectations, it once again left interest rates unchanged.
While FED Chairman Jerome Powell and other members, except for two members, are cautious about interest rate cuts, US President Donald Trump continues to press for interest rate cuts.
As the tension between Trump and Powell over interest rates continues, Trump has been harshly criticizing Powell, whose term expires in 2026, while also beginning talks with potential replacements.
While the turmoil at the Fed continues, Trump has made a welcome move. According to Reuters, Adriana Kugler, one of the Fed's most hawkish members, abruptly announced her resignation.
This means Trump won't have to wait for Kugler's term to expire in January of next year and will be able to appoint someone of his choosing to the Fed.
Sudden Resignation at the FED!
The Fed announced in a statement that Adriana Kugler has resigned early from her position and will leave the central bank on August 8.
The Fed also stated that Kugler will return to Georgetown University as a professor next fall.
Kugler's sudden resignation reportedly presented Trump with the opportunity to appoint Powell's replacement Fed chair candidate to the Board of Governors beforehand.
After Kugler submitted his resignation letter, Trump stated that he was “very pleased.” Trump also wrote on social media, “Kugler knew Powell was wrong on interest rate decisions, that's why he resigned. Powell should resign too.”
“There's no political motivation for Kugler's resignation, but the effect of what he did was call Trump's bluff. He's putting the ball in his court and saying, 'Look, you're putting too much pressure on the Fed and you want some control over the candidates, so here's your opportunity,'” said Derek Tang, an analyst at research firm LH Meyer.
*This is not investment advice.
