Adriana Kugler, a governor of the Federal Reserve (Fed), the body that determines U.S. monetary policy, including interest rates, has unexpectedly resigned, leading to speculation that a successor to Fed Chair Jerome Powell could emerge sooner than anticipated.

Powell's term as chair runs until May of next year, and President Donald Trump has urged him to resign voluntarily, even giving him the nickname "Too Late."

In an interview with Newsmax on the 1st (local time), President Trump stated he had no intention of firing Powell, but on Truth Social, he argued that "She (Kugler) knew (he) was doing the wrong thing on interest rates (which is why she resigned), and he should resign too."

Regardless of whether Powell steps down early, Kugler's resignation has increased the likelihood that President Trump will select the next Fed chair early, according to Bloomberg News.

While President Trump was initially expected to nominate a candidate for Fed chair early next year, ahead of Powell's term expiration, he could effectively tap Kugler's successor as a de facto candidate for the next Fed chair.

While it is customary for Fed governors to step down from their board positions after their term as chair ends, Powell could potentially remain on the board until 2028, making this "Trump's only opportunity," Tobin Marcus, senior U.S. policy and politics strategist at Wolfe Research, told Bloomberg.

President Trump has previously stated that he has two to three potential candidates in mind for the next Fed chair.

Candidates being discussed include Kevin Hassett, Chairman of the White House National Economic Council; Scott Bessent, Treasury Secretary; and Kevin Warsh, a former Fed governor. Christopher Waller, a current Fed governor appointed by President Trump during his first term, is also considered a candidate.

The Fed Board of Governors consists of seven members, including the chair. Among them, Vice Chair Michelle Bowman and Governor Waller, both appointed by President Trump, advocated for an interest rate cut at the Federal Open Market Committee (FOMC) meeting last month. Of the remaining five governors, three have more than six years left on their terms, excluding Chair Powell and Governor Kugler, who has resigned.

President Trump and Chairman Powell. Yonhap News. 

Yonhap News