Treasury Secretary Janet Yellen, who testified beside Mr. Powell at the Senate hearing on the pandemic economy, told senior White House advisers in August that she supports reappointing Mr. Powell as chair. Her support is a key voice in the White House deliberation process given her prior experience as Fed chair and at the central bank.
Fed Governor Lael Brainard is seen as another leading contender for the chair seat. Ms. Brainard and Mr. Powell have diverged in their views on financial regulation in particular.
Earlier on Tuesday, Ms. Yellen warned that her department will effectively run out of cash in about three weeks unless Congress suspends or increases the federal debt limit, putting pressure on lawmakers to avert a default on U.S. obligations.
"Treasury is likely to exhaust its extraordinary measures if Congress has not acted to raise or suspend the debt limit by Oct. 18," Ms. Yellen said in a letter to congressional leaders.
Ms. Yellen said separately at a Senate hearing that "catastrophic" results would follow a failure to address the debt limit, including a "financial crisis" and recession.
Ms. Yellen's latest timeline is somewhat sooner than many on Wall Street anticipated, and her warning intensified signs of financial market concern amid an impasse between Republicans and Democrats on addressing the debt ceiling.
Ms. Warren's opposition to Mr. Powell also complicates the Biden administration's calculus. It will either need to increase its push for Mr. Powell or pick another candidate, who may face more resistance from Republicans in the confirmation process in a Senate in which Democrats hold 50 of 100 seats.
A White House official did not offer an immediate comment.
Mr. Powell, a Republican nominated to the Fed Board by former President Barack Obama and elevated to chair by former President Donald Trump, has received verbal support from several Republican senators for another four years.
Ms. Warren's declaration against him signals she doesn't believe that a new vice chair of supervision can set the agenda with a chair who may not agree with him or her. Mr. Powell has shown flexibility in the past, at least resisting dissenting in board votes against initiatives by Daniel Tarullo, who led an aggressive overhaul of supervision in the wake of the 2008-2009 financial crisis.
Mr. Powell interprets the Dodd-Frank Act — the 2010 reforms put in place to strengthen banks after the crisis — in rather strict statutory terms. The law says that the vice chair of supervision "shall develop policy recommendations" for the Fed Board and shall "oversee the supervision and regulation of such firms."
The chair seat is just one of four positions the Biden administration could fill. Vice Chair Richard Clarida's term as a governor expires in January, and Mr. Quarles' term as vice chair of supervision expires next month. In addition, there is a vacant seat.
The appointments could have a dramatic impact on expectations of policy next year. What's more, Robert Kaplan and Eric Rosengren, presidents of the Dallas and Boston Fed banks, have resigned in the wake of scrutiny over their stock trading in 2020, possibly throwing two new forecasts into the equation when Fed officials meet in December.