President Donald Trump has a new way to needle Federal Reserve Chair Jerome Powell. He just needs Senate Republicans to sign off.
On Friday, Federal Reserve Gov. Adriana Kugler announced that she would step down from her post, effective next week. This means Trump will get to name her replacement for the seven-member central bank.
“It has been an honor of a lifetime to serve on the Board of Governors of the Federal Reserve System,” Kugler said in a statement. “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.”
Trump has repeatedly criticized Powell over the central bank’s refusal to cut interest rates thus far. His nominee could provide another voice pushing Powell to act. It’s a delicate balance, though, as the central bank prizes its independence — it’s why Fed governors serve 14-year terms.
In September 2023, Kugler was confirmed to serve out the term of former Federal Reserve Gov. Lael Brainard, who left the central bank to join the Biden White House. Kugler’s term would have expired in January.
In the statement, the Federal Reserve said Kugler would return to Georgetown University, where she had taught previously, to be a professor this fall.
Trump has struggled to fill Fed vacancies
Trump’s ongoing beef with Powell, who has tried to avoid commenting on the president’s frequent barbs, would likely come to a head in a confirmation process.
If Senate Republicans stick together, Trump could ram through his pick to replace Kugler without any Democratic support.
Trump’s other remaining first-term appointees, Fed Govs. Christopher Waller and Michelle Bowman, have become increasingly defiant of Powell. Earlier this week, they offered a rare dual dissent during the Federal Open Market Committee’s vote on rate cuts.
Some Democrats are spoiling for a fight. Trump’s first term showed that the once sleepy confirmations of central bank officials have begun to transform into political fights.
Republicans had to push through Waller’s confirmation during the lame-duck session following Trump’s 2020 election loss. Waller survived by only one vote, 48-47.
In 2018, Trump was able to get Fed. Gov. Michelle Bowman through much easier. Earlier that year, Powell received the easiest confirmation of all. Of the president’s first-term nominees, only Bowman, Waller, and Powell remain.
Republicans didn’t always give Trump what he wanted. He unsuccessfully tried to appoint three different individuals to the Fed: former GOP presidential hopeful Herman Cain, campaign advisor Stephen Moore, and economist Judy Shelton.
Out of the trio, Shelton came the closest to confirmation, stalling out after a 47-50 vote during a lame-duck session following the 2020 election. President Joe Biden later withdrew Shelton’s nomination.
This time around, Trump has a Senate GOP molded much more in his image. With few exceptions, his other Cabinet and lower nominees have been confirmed.
Read the full article here
