The White House is considering whether to give Powell, a Trump appointee, a second four-year term. Replacing him would provide an opportunity to refresh Fed policy but recent reports suggest that Powell has the significant support of Treasury Secretary Janet Yellen.
Markets will react negatively if Powell is replaced by someone regarded as too pliant to the White House.
Biden knows that progressive Democrats want the Fed to put greater emphasis on distributional inequality and racial wealth gaps.
The Fed will continue to face the challenge of negotiating between higher inflation and interest rate rises to ensure stability.
Economic indicators are proving difficult to read in the post-pandemic environment, challenging the efficacy of monetary policy.
