The news was reported by the Associated Press, citing a senior White House official speaking on the condition of anonymity.
Among the leading candidates are former Treasury secretary Larry Summers and current Fed vice chair Janet Yellen. But the chair isn’t the only position Obama will have to fill – he may have to appoint up to five new members to the Board of Governors.
It will be the first time in Obama's presidency that every member will have been appointed by him.
Here are the odds at time of writing for next Fed chair courtesy of Paddy Power: