Donald Trump’s advisers are encouraging him to nominate a temporary Federal Reserve governor to fill the soon-to-be vacant seat on the central bank’s board, according to people familiar with the discussions.
Naming a governor to serve out the term for the seat opening soon — set to expire in January 2026 — would give Trump additional time to interview candidates to serve as chair when Jerome Powell’s tenure leading the central bank ends in May of next year, the people said. Fed Governor Adriana Kugler announced last week that she plans to vacate her role on Aug. 8.
A short-term governor is likely to be someone who is already in the government and who has previously been confirmed by the Senate for a federal job, two people said. The nominee will need to clear Senate confirmation, a vetting process that has traditionally taken months, but could be expedited if Trump pressures lawmakers to quickly fill the seat.
Trump is slated to meet with advisers on Wednesday about the Fed pick, one person said.
Trump on Tuesday said he would make his decision for a replacement for Kugler this week as he looks to make his imprint on the central bank. No decision should be deemed final until announced by Trump, a White House official said.
Trump on Tuesday said that he’s weighing whether to fill the seat with a short-term pick or someone he would likely elevate to Fed chair next year.
“We’ll either decide on one for permanence or the four-month period — the term. You know, there’s a term of about a number of months,” Trump told reporters at a White House event on Tuesday.
Kugler’s early departure hands Trump a sooner-than-anticipated opportunity to fill the Fed board with a governor who more closely aligns with his preference for lower interest rates.
Trump has been highly critical of the Fed, repeatedly blaming the central bank and Powell for being too slow to lower interest rates. Trump has argued the central bank — which has so far left rates unchanged in 2025 — is keeping the federal government’s debt-servicing costs too high and restraining economic growth.
“It’s a lot of trouble to do it for four months but it’s a critical four months as well and Trump really wants the Fed to follow through for some of the rate cuts that have been on the table,” said Derek Tang, an economist at LH Meyer/Monetary Policy Analytics, Inc.
He said it could hurt the Fed’s credibility to have a governor in place, even for several months, who is clearly pushing the president’s agenda.
“If you don’t play it well, then you might actually un-anchor the long end of the Treasury yield curve,” Tang said. “Inflation expectations might go up because even though you’re saying this a four-month position, you’re setting a precedent that you’re willing to use this vacancy in this manner.”
But the addition of a dovish governor to the Federal Open Market Committee, which sets policy, is unlikely to yield an immediate shift. The FOMC is composed of the seven members of the Board of Governors, based in Washington, and five of the Fed’s regional reserve bank presidents. A majority vote is required to adjust rates.
Among the broader group of 19 policymakers who participate in FOMC meetings, a majority signaled in June that they expect two rate cuts this year, a projection that makes a move in September a strong possibility.
Two Fed governors Christopher Waller and Michelle Bowman, both Trump appointees, voted against the July decision to hold rates steady, the first time two members of the board had dissented since 1993.
Trump on Tuesday said he was considering four candidates for the post of Fed chair, including Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett. He also said that Treasury Secretary Scott Bessent had said he did not want to be in consideration for the post.
“We’re looking at the Fed chair, and that’s down to four people right now,” Trump said Tuesday. “Well, I can tell you because I’ve already said, there’s two Kevins and two other people.”
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