Trump Just Got a Fresh Shot at Bending the Fed to His Will

Biden appointee exit offers president potential help on interest rates—and way to make life hard for Chair Powell

- Nick Timiraos & Brian Schwartz

In the chess game over bending the Federal Reserve to his will and sidelining Chair Jerome Powell, a significant piece just fell into President Trump's hands.

Fed governor Adriana Kugler said unexpectedly last week that she will leave the central bank this Friday, about six months before her term was set to end. That gives the president the chance to install his own pick on the rate-setting committee earlier than he had expected, adding pressure on Powell with a new ally who can push for interest-rate cuts.

Trump could also use that selection to position someone as the heir apparent to Powell, creating a competing voice that markets listen to for signals about the Fed's future direction.

Trump told reporters Tuesday he would make his decision later this week, including whether to nominate to the post his choice to succeed Powell next year or whether to instead pick someone who could simply serve out the last few months of Kugler's term.

"The bonus for Trump is he can spend less time complaining about Powell because he can spend time focusing on who he wants," said Stephen Myrow, managing partner at Beacon Policy Advisors, a research firm.

Kugler didn't offer any reason for resigning last week. The Fed said she was returning to the faculty at Georgetown University, where she taught before President Joe Biden nominated her to the Fed post in 2023. Kugler has been an advocate for holding rates steady this year.

Trump has been seriously considering tapping Kugler's successor to be his next Fed chair, according to a senior administration official. As of late Monday, Trump was still hearing out allies for who should succeed Kugler and had yet to make a decision on the person he will nominate, according to a person with direct knowledge of the matter.