Fed Chair Jay Powell’s campaign to be reappointed is looking like less of a sure thing. His main rival for the job, Fed Governor Lael Brainard, is starting to look like the less risky choice.

The explosion of stock-trading scandals by two Fed regional bank presidents, Robert Kaplan and Eric Rosengren, resulted in their early retirement. Then, last Friday, Bloomberg News disclosed that Fed Vice Chair Richard Clarida had also made securities trades, on the very eve of a Fed announcement of how it would be supporting the pandemic economy, in February 2020.

There are now two separate investigations under way—by the SEC and the Fed’s own inspector general—and the Justice Department may launch its own inquiry.

For Powell, who may well be innocent of personal wrongdoing, the problem is twofold. First, the White House wanted to get this decision made by now, but they obviously can’t act until the results of the investigations are known, which could take months.

The other problem is appearances. In a scandal-free Biden administration, it looks like Powell presided over a culture at the Fed that was lax on insider trading.

As the inflation rate keeps ticking upward, a separate problem is that Biden doesn’t want the Fed pressured to tighten money prematurely. Powell has been good on this so far. The only Fed governor even more reliable on monetary policy is Lael Brainard.

Brainard led on the creation of a new Fed framework for monetary policy that created more latitude on keeping credit cheap and plentiful for the sake of full employment—an implicit rebuke to former Fed Chair Janet Yellen for keeping money too tight for too long. My sources say there is little love lost between Yellen and Brainard.

Yellen has been one of Powell’s key promoters inside the administration. Even Yellen, however, has lately been saying, publicly anyway, that Biden has not made up his mind.

Powell also looks like a problem since Elizabeth Warren has gone public with her case against his regulatory laxity. Again, the contrast is with Brainard, who has championed tighter bank regulation, as documented in this New York Times piece by Peter Coy.

The widely touted benefits of reappointing Powell, a Republican who has helped the recovery with friendly monetary policy, are rapidly being overtaken by the costs.