WASHINGTON: US President Donald Trump said on Wednesday (Aug 6) he would likely in the next two to three days nominate a candidate, out of a short-list of three, to serve the remaining months of a soon-to-be-vacant position on the Federal Reserve’s Board of Governors, leaving the choice of a permanent replacement for a later date.
“We started the interviewing process,” Trump told reporters in the Oval Office, saying that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Vice President JD Vance were all involved.
“We have some great candidates. It’s probably down to three,” he said.
Fed Governor Adriana Kugler last week unexpectedly announced she was leaving as of this Friday to return to Georgetown University, where she is a tenured professor. Her term had been set to expire on Jan 31, 2026.
Kugler’s resignation leaves an opening at the seven-member Fed Board led by Chair Jerome Powell, whom Trump has repeatedly criticised for not lowering interest rates.
Each Fed governor and five of the 12 Fed bank presidents cast one of 12 votes on interest rates at each of eight meetings a year; at the most recent meeting on Jul 29-30 the vote, with Kugler absent, was 9-2 in favour of leaving the policy rate unchanged.
Two candidates whom Trump mentioned on Wednesday – former Fed Governor Kevin Warsh and current National Economic Council director Kevin Hassett – have both said they think Trump is right to push for lower rates. Trump did not identify the third candidate.
On Wednesday Trump indicated the current Fed governor search would focus only on finding someone to serve out the remaining months of Kugler’s term.
“We’re probably going to go with a temp and then a permanent, I think,” Trump said. “So, the temp is going to be named, I’d say, in the next two, three days, and then we’re going to go permanent.” It is unclear how quickly a placeholder nominee would get into the position.
TRUMP LOOKS TO WALL STREET
Members of the Board of Governors are appointed to 14-year terms. Kugler herself, who has served since September 2023, had been appointed to fill the unexpired term of Lael Brainard.
All nominees to the Fed require Senate confirmation – including a hearing before the Senate Banking Committee, a vote from that panel advancing the nomination and a series of floor votes before the full Senate, where Democrats have been slowing the pace of approval for Trump appointees.
The Senate is currently on recess and doesn’t return until Sep 2, when lawmakers will have plenty of competing demands, including a likely fight over a potential government shutdown. There are just four rate-setting meetings remaining in the unexpired portion of Kugler’s term, with the first one on Sep 16-17.
Trump said again on Wednesday that Bessent was not interested in the Fed job, and said the new governor nominee would have roots in Wall Street. “Essentially, we’re all from Wall Street, aren’t we?” he said.
Trump has long sought to oust Powell, whom he had originally named as the Fed chief during his first term, or at least replace him when his term ends in May. Powell, unlike many of his predecessors at the Fed, does not hold a doctorate in economics, but holds a law degree and had worked as a lawyer and an investment banker in New York.
On Tuesday, Trump said he had narrowed his search for a new Fed chair to four people, one of whom is thought to be current Fed Governor Christopher Waller.
