The resignation of Governor Kugler allows Trump to appoint Jay Powell's replacement to the Federal Reserve's board now

Governor Adriana Kugler did not attend or vote in the FOMC meeting last week (where they voted 9 - 2 to hold interest rates in her absence). The official reason given was that she was dealing with a "personal matter". On August 1st she stepped down; her last day will be August 8th.

Trump told reporters he was "very happy" about the open spot on the Fed's board. Earlier on August 1st, he'd made the following posts on Truth Social:

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The Chairman of the Federal Reserve has to be one of the seven Fed Governors. Governor Kugler was due to step down in Jan 2026, at which point it was expected that Trump would appoint Powell's successor.

Her stepping down early gives Trump the opportunity to place Powell's successor on the board ahead of time. If a compliant Senate ratifies the appointment quickly, the new Governor could be in place before the FOMC meeting on September 17th.

That means the next FOMC meeting will feature the nightmare scenario of the Current Chairman of the Fed and his open successor in the same meeting, duking it out over interest rate cuts.

Of course Trump could appoint one of the five sitting governors to the Chair, but it's thought that the reason he'd not yet made a move against Powell is because he didn't rate any of them.

Some people think Trump was persuaded by Bessant that it was too risky to fire Powell ahead of the end of his term. But Trump is getting nervous. If inflation finally emerges in the stats, his new Fed Chair won't be able to persuade the other FOMC members to cut interest rates no matter how much Trump yells.