Federal Reserve Chairman Jerome Powell’s odds at renomination continue to hang in the wind, as the White House works through whether or not they should bring in fresh blood to the head of the central bank.

Complicating his path to a second term: a scandal that has engulfed at least three senior Fed officials, centered on big financial bets they made during 2020. Regional Fed Presidents Robert Kaplan and Eric Rosengren stepped down from their roles after reporting revealed bets on real estate and individual stocks.

Fed Vice Chairman Richard Clarida, the central bank’s number two official, also caught attention for rotating millions of dollars out of a bond fund and into a stock fund in February 2020 — right before the Fed started taking emergency actions.

“Though Powell is still the odds-on favorite to be picked eventually, this has created a legitimate challenge for President Biden,” Eurasia Group Managing Director Jon Lieber wrote last week.

The challenge is being mounted largely by Sen. Elizabeth Warren (D-Mass.), who had already labeled Powell a “dangerous man” for his record on financial regulation. The trading scandal added another reason for her to publicly state her disapproval of his possible nomination.

“Once there is a problem, a quick and aggressive response is critical. Chair Powell has failed at both tasks,” Warren said on the floor of the Senate on Oct. 5.

For his part, the Fed chairman told lawmakers that he would “rise to this moment” to address any damage to the central bank’s independence.

Shortly after the revelations of trades made by Rosengren and Kaplan, Powell launched a review of the trades and the central bank’s ethics codes.

“The appearance is obviously unacceptable,” Powell told the Senate Banking Committee on Sept. 28.

Still the favorite

Powell still appears to be the top candidate for the job. Betting website PredictIt shows Powell leading considerably over Fed Governor Lael Brainard, a favorite among more progressive groups.

One wrinkle to the ethics scandal: Brainard is the head of the committee tasked with reserve bank affairs. That committee is responsible for, among other things, assessing the fitness of regional bank presidents (like Rosengren and Kaplan) to serve in their roles.

This means Brainard could also be perceived as responsible for the lack of controls that allowed these trades to happen.

“My instinct is that with Powell acting quickly to address the issue and assuming he can keep the scandals at arm’s length, he is still the favorite for the top spot,” said Tim Duy, SGH Macro Advisors chief U.S. economist, in a note last week.

In the meantime, Powell has been working the halls of the Senate, where a 50-50 split between the Democrats and Republicans complicates the path to possible confirmation.

The day after Warren delivered her rebuke, Powell was spotted wandering the Hart Senate office building.

Biden himself has been tight lipped on any Fed nominations. Asked on Oct. 5 by the press pool if he had “confidence” in Powell as a Fed chair, the president responded with “thus far, yes.”