Trump senses chance: resignation on the board of the US Federal Reserve Fed

With the re-occupation of a board position in the US Federal Reserve, President Donald Trump gets the chance to influence their future course in his sense. In an interview, he has so far refrained from dismissing Fed chief Jerome Powell because of impending market turbulence. However, he expressed “very happy” about the surprisingly announced resignation of board member Adriana Kugler because a place in the central bank council is now becoming free. The committee defines the important key interest rate, which can indirectly promote economic growth.

Trump has long vehemently demanded that the interest rate have to be significantly reduced so that loan costs are also decreasing and consumption and investments are stimulated. If the US economy is boosted, this usually turns positively on the president’s approval values. However, in view of existing inflation risks, the FED relies on a prudent monetary policy as a result of Trump’s radical customs policy and hesitates with interest rate cuts.

Trump Powell personally circles the fact that the interest reduction he hoped for by him has not occurred. At the most recent decision of the Central Bank Council on Wednesday, however, it was noticed that – unlike before – not all members did not support the guiding interest rate between 4.25 and 4.5 percent. Two of eleven representatives present – Michelle Bowman and Christopher Waller – pleaded for a reduction. Waller is said to have political proximity to Trump, and he is acted as a possible successor to Powell’s successor to Finance Minister Scott Bessent.

There are rarely deviating voices on the Central Bank Council. It seems conceivable that at the next decision, other members could swing in under the pressure of the US president. The votes would “only get stronger,” wrote Trump on his Truth Social platform.

Kugler’s unexpected resignation to August 8, which became known on Friday afternoon (local time), is an opportunity for him in this regard. Because the President nominates the board members – to be confirmed by the Senate, which in turn make up the majority of the powerful central bank council. The boss in the White House can indirectly influence the selection of loyal followers. In January 2026, Kugler’s term would not have expired on a regular basis.

The Republican once again described the FED leader Powell, whom Trump has publicly covered with abuse and demands for resignation for months. Kugler knew that Powell had done the wrong thing about the interest rate, Trump claimed. “He should also step down!” At the same time, the President demanded that the FED board “take control” if the central bank boss should continue to refuse to “clearly” reduce the key interest rate.

Because Trump has not yet received what he is asking for, he has threatened Powell’s release several times. However, the legal hurdles for such a step are high. It is not legally clarified whether a US President can settle the head of the central bank at all. Powell’s term of office ends next May.

When asked by a moderator of the ultra-conservative US broadcaster Newsmax, why he didn’t fire Powell, Trump said: “I would put him off in no time at all, but they say that would worry about the market”. In addition, the central bank leader will be out of office in a few months. When asked again whether Powell keeps his post for the time being, Trump stated that this was “with a high probability”.

According to the recent information from the FED, growth in the United States has weakened in the first half of the year, while uncertainty about the economic prospects is still great. The former could be a sign that the Fed will actually reduce the key interest rate again in September since December 2024.

The key interest rate determines which sentence can borrow money from the central bank. In addition, governments with low interest rates are easier to go into debt: According to an assessment of the household office of the US congress, the deficit will increase by around 3.3 trillion (around 2.8 billion euros) within the next ten years.