This is an important announcement, for markets and the economy.   

If we take the actions of the Biden administration as a guide on how they would like to see the Fed behave, we would deduce that they would like to see a Fed that: 1) supports the social and climate agenda, and will maintain monetary policy to support the fiscal spending plans, 2) is willing to clamp down on the banking sector, and 3) is in favor of a central bank-backed digital dollar. 

If we evaluate the history of Jay Powell's tenure as Chair, he doesn't seem to fit the mold.  This is a guy that raised rates into a low inflation, slow recovering post-great financial crisis economy – even as stocks were collapsing in 2018.  This is a guy that has, no his watch, eased some of the bank regulations that were put in place in response to the financial crisis.  And this is a guy that has carefully avoided taking a position on the digital dollar concept.    

That said, it does seem like he has made a concerted effort to keep himself in the running for another term, through his maneuvering of the past year.  Among those maneuvers, sticking to the "transitory inflation" talking point far longer than he should have.  

Now, on the other hand, the top candidate in the running to replace Powell, ticks all of the boxes.   Lael Brainard is one of the most dovish Fed Governors.  And with Brainard, you get a Fed that would support the move to a central-bank backed digital currency. And she will execute on the Biden social and climate agenda (which includes tougher positions on bank regulation, "looking out for Main Street"). 

So, how do things look?  The betting markets still see a Powell reappointment, though the odds are tightening — a 64% chance for Powell vs. 90% chance back in September.

Not only would a removal of Powell be disruptive for markets from a continuity standpoint, it would imply an even more dangerous inflation outlook from a policy standpoint.