With the resignation of the Federal Reserve Director (Fed, the US Central Bank) Adriana Kugler, US President Donald Trump, may appoint a new name to the Council that would be the “de facto” president of the monetary authority, warns Queen’s College and Allianz Chief Economic Counselor Mohamed El-Eian.
The term of the current head of the US Central Bank, Jerome Powell, ends in May next year. Until then, Kugler’s successor could be seen as a “shadow president” of the Fed, according to El-Erian. “This would happen after another week of intense presidential criticism of Powell,” he explains.
Analysts already warn that this scenario would cause confusion in the market about who is the most influential voice in the federal open market committee (FOMC). With Kugler’s announcement, the market has now seen a higher chance of cutting interest rates ahead.
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After the presidency period, Powell would still have the right to continue as a director by 2028, but he did not say if he intends to follow at the institution.
