As Jerome H. Powell’s tenure as Federal Reserve Chairman comes to an end, President Biden’s decision whether or not to keep him in office has become more complicated amid vocal opposition from Senator Elizabeth Warren to his leadership and an ethics scandal that engulfed his main bank.

Mr Powell, whose four-year term as President expires early next year, continues to stand a good chance of being re-appointed as he has earned respect in the White House for his aggressive use of the Fed’s tools in the wake of the pandemic recession, said people familiar with the administration’s internal discussions.

But the decision and timing of an announcement remains subject to an unusually high level of uncertainty, even for a prominent economic position like the Fed chairmanship. The White House will likely announce Mr. Biden’s choice at some point in the coming weeks, but that too is tenuous.

The administration is concerned about other major priorities, including the adoption of an expenditure law and the lifting of the country’s debt limit. But the uncertainty also reflects the growing complications around Mr Powell’s re-appointment. Ms Warren, Democrat of Massachusetts, criticized Mr Powell’s track record in regulating big banks and called him last week a “dangerous man” to head the central bank.

She also targeted Mr Powell for failing to prevent senior Fed officials from trading securities in 2020, a year in which the central bank rescued the markets, potentially giving them inside information. According to recent reports, two regional presidents traded assets that the Fed’s actions could have influenced for their profit. And Richard H. Clarida, vice chairman of the Fed, moved money from bond funds to equity funds in late February 2020, just before the Fed hinted it would save markets and the economy. .

“It is not known why President Powell has not taken action to prevent this activity,” Ms Warren said in a Senate speech on Tuesday, after sending a letter on Monday calling on the Securities and Exchange Commission to investigate whether the transactions amounted to insider trading. “The responsibility for protecting the integrity of the Federal Reserve rests entirely with it. “

Tuesday, Karine Jean-Pierre, spokesperson for the White House, told reporters that Mr. Biden continued to “trust Powell at this time.”

The White House’s impending decision on Mr. Powell’s future comes at a critical time for the US economy. Millions of jobs are still missing from before the pandemic, and inflation has risen as strong demand collides with supply chain disruptions, presenting dueling challenges for the Fed chairmanship. The next Fed leader will also shape his involvement in climate finance policy, a possible central bank digital currency, and the central bank’s ethical dilemma response.

“This is starting to look like an incredibly big time for the Fed,” said Dennis Kelleher, managing director of Better Markets, a group that has criticized the Fed’s deregulation measures in recent years, and criticized it for its lack of ethics. surveillance.

The administration is under pressure to make a quick decision, in part because the Fed’s seven-person board of governors in Washington will soon be faced with a wave of openings. A governor post is already open. Mr. Clarida’s term ends early next year, leaving another vacant position, and Randal K. Quarles will see his term as vice chairman of the board for oversight expire next week, although his term as governor. ends in 2032.

By announcing the key choices soon, the Biden administration could ensure that someone was ready to take on Mr Quarles’ leadership role. And appointing multiple officials at a time could give the president a chance to show he is addressing the concerns of Democrats in Congress, who want to see more diversity at the Fed, and officials who are in favor of tighter banking regulation. .

But the ethical scandal threatens to complicate the choices.

Recent financial information has shown that Robert S. Kaplan of the Federal Reserve Bank of Dallas traded millions of dollars in individual stocks last year, and Eric S. Rosengren of the Federal Reserve Bank of Boston traded securities. related to real estate even as he publicly warned about the problems in this sector. The deals have drawn criticism as they took place in a year in which the Fed had a huge impact on a wide range of financial markets.

Both men stepped down as regional chairmen amid controversy, although Mr Rosengren said he was leaving for health reasons.

Attention has now turned to Mr. Clarida. All of its transactions were in general funds, not individual securities, and have been public since May, but have drawn attention amid current calculations. He sold a stake in a bond fund totaling at least $ 1 million and transferred that money to equity funds on February 27, 2020. The transaction gave him greater exposure to equities little long before the Fed puts in place policies that encourage such investments.

The Fed said Mr Clarida’s trades were part of a planned portfolio rebalance, but declined to say when the planning took place.

Mr Powell launched an internal ethics review last month. A Fed spokesperson said Monday that an independent government watchdog would investigate whether senior officials violated relevant ethical rules or laws.

But some progressives have seized the problems to support their argument that Mr Powell should not be reappointed. Jeff Hauser, founder and executive director of the Revolving Door Project, who urged Biden to keep corporate influence out of his administration, pointed out that the Fed chairman himself has moved money in the year last, listing 26 deals, although all in broad-based funds. He also noted that Lael Brainard, Fed governor and longtime frontrunner to replace Powell if he is not reappointed, did not report any transactions during the year.

“If you are trying to go above and beyond and be faultless, not negotiating is the best option,” Hauser said.

It’s unclear how badly the backlash will eventually hit Mr Powell. During his testimony before a Senate committee last week, lawmakers questioned him on ethical issues without explicitly blaming him for it.

The exchanges were not historically abnormal. Mr. Kaplan has traded in stocks throughout his tenure, including when Mr. Powell’s predecessor, Treasury Secretary Janet L. Yellen, headed the central bank. Ms Yellen’s vice chairman Stanley Fischer bought and sold individual stocks, according to her 2017 revelations. Ms Brainard herself has in the past done large-scale transactions. It was the more expansive role of the Fed in 2020 that stimulated the backlash.

Agencies often need a “wake-up call” to notice evolving problems with their surveillance rules, said Norman Eisen, a senior researcher at the Brookings Institution and former White House ethics adviser to Barack Obama.

“My personal view is that President Powell is pivoting strongly to address weaknesses in the Fed’s ethics system,” he said.

Ms Warren cited regulation, not ethical issues, when she first announced that she would not be backing Mr Powell. Democrats have been concerned for years about the Fed’s approach to deregulation under Mr. Quarles’ leadership. Mr Powell has relied heavily on his vice president for oversight, as the central bank has made bank stress tests more transparent and allowed big banks to become more intertwined with venture capital.

Critics say Mr. Powell’s reappointment is to keep this more passive regulatory approach. And some progressive groups suggest that if Mr Powell stays in place, Mr Quarles will feel emboldened to stay: he has hinted he could stay as Fed governor after his leadership term ends.

That would mean four of the seven officials on the Fed’s board – a majority – would remain appointed by Republicans. Two other governors – Michelle W. Bowman and Christopher J. Waller – were both appointed by President Donald J. Trump.

During Mr Powell’s Senate testimony last week, Ms Warren said that renaming him as president meant “betting that, for the next five years, a Republican majority in the Federal Reserve, with a Republican president who regularly voted to deregulate Wall Street, will no longer tip this economy towards a financial cliff.

Even without Ms Warren’s approval, Mr Powell would likely gain enough support to authorize the Senate Banking Committee, the first step before the entire Senate could vote on his nomination, due to his continued support from Republicans on the committee. But having a powerful Democratic opponent that the administration needs on other legislative priorities is not helpful.

The Fed chairman has strong allies in the administration, including Treasury Secretary Ms. Yellen. But the decision is up to Mr. Biden.

“I know he will speak to a lot of people and look at a wide range of evidence and opinion,” Ms. Yellen said, speaking on CNBC Tuesday.