Is Powell Next As Fed Governor Adriana Kugler Resigns?

Trump’s call for Powell to resign after Fed Governor Kugler’s exit is fueling political pressure, but markets expect Powell to stay.

Trump Pressures Powell to Resign as Fed Vacancy Opens Early

Fed Governor Adriana Kugler has resigned, giving Donald Trump a chance to reshape the Federal Reserve’s policy direction. Her resignation takes effect on August 8, ahead of her term’s scheduled end in January 2026.

Trump quickly used her departure to escalate pressure on Fed Chair Jerome Powell. In a post on X, he wrote, “‘Too Late’ Powell should resign, just like Adriana Kugler, a Biden Appointee, resigned. She knew he was doing the wrong thing on Interest Rates. He should resign, also!”

Before the last Fed meeting, Trump has urged Fed Chair Jerome Powell to cut interest rates. Instead, the Fed left interest rates unchanged. Meanwhile, Kugler’s resignation letter made no mention of whether Powell will resign or any policy disagreements.

She had supported holding interest rates steady in her last public remarks and did not oppose Powell’s stance. Markets reacted strongly to the news. The Bloomberg Dollar Spot Index fell 0.9% as traders priced in two rate cuts by year-end. If Powell resigns, Trump may nominate a replacement who supports lower rates.

According to White House reporter Aamer Madhani on X, potential picks include Kevin Hassett and Kevin Warsh. Kugler’s exit gives Trump early influence over Fed leadership before Powell’s term ends in May 2026.

Markets Doubt Powell’s Exit as September Rate Cut Odds Climb

Despite many Trump-favorite Fed governors now, the possibility of Powell being fired is decreasing. Prediction markets show low confidence that Jerome Powell will resign or be removed as Fed Chair in 2025.

According to Polymarket data, there is only a 14% chance Powell leaves his position by year-end. Market traders appear to believe Powell will not resign despite the political noise. Also, there is no indication that Powell intends to resign or that the Fed’s board is pushing for his removal.

His term runs through May 2026, and no formal process to oust him has been initiated. However, traders expect the Federal Reserve to cut interest rates by 25 basis points at its September 17 meeting.

According to another Polymarket data, the probability of a 25-basis point cut now stands at 71%. The chance of no change is 22%, while a larger cut of 50 basis points holds an 8.3% chance. Odds of a rate hike are under 1%.