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(Bloomberg) -- Investors are starting to assess the Fed’s policy path in 2018 under Jerome Powell after the Wall Street Journal reported that he would be nominated as the next Fed Chair by Donald Trump Thursday. Powell is expected to pursue policies similar to Yellen’s cautious approach. Strategists and other analysts said that more rate hikes can’t be ruled out next year after the FOMC statement earlier Wednesday largely kept the prospect of a December rate hike alive. TS Lombard’s Steven Blitz sees rate hikes in March and June; BlackRock’s Rick Rieder also expects two to three hikes in 2018 after a move in December. Odds of a December rate hike remain steady at ~82%, based on OIS pricing, with approximately one more rate hike priced in by September 2018 meeting

• Most U.S. stocks maintained gains, while the dollar pared its advance and 10-year Treasuries extended gains before quickly reversing after the WSJ report
• NOTE: For more, see Fed Signals December Hike on Track as Trump Mulls Next Chair
• TS Lombard (Blitz, note)
  • Powell’s selection “gives the markets some measure of policy continuity and gives Trump someone open to bank deregulation”; “win/win as they say”  
  • Critical near-term policy shift for Fed will be in changing bank regulation
  • Wouldn’t be a surprise if John Taylor is quickly named as successor to Stanley Fischer 
• Societe Generale (Omair Sharif, phone interview)
  • A Powell nomination “means we are continuing along the path of gradual rate hikes next year”; “he’s a continuity candidate when it comes to rate policy and his bigger differences with Yellen are on the regulatory front” 
  • “I’m not sure it means a lot for the Fed’s 2018 rate path. I really don’t expect any significant changes for 2018”
  • Sharif expects three rate increases in March, September and next December; also says the Fed is likely to signal three 2018 hikes when it updates its projections at year- end 
• BMO Capital Markets (Ian Lyngen, Aaron Kohli, in note, by phone)
  • “While a Taylor Fed chairmanship would have brought the market closer to the implied path of rate hikes seen in the dot plot, a Powell leadership will leave in place the market’s willingness to discount the projected path of rate hikes”
  • “A flatter curve was our biggest takeaway from the Fed”; 5s30s spread near lowest since November 2007
  • “Should we continue down this path data-wise, it is clear that the Fed remains a ‘go’ for December with little in the way to stop them”
  • “It’s in fact not clear what it would take to halt the Fed at this juncture and even the rising odds of an early December shutdown may not be enough”
  • Would take a “significant miss” on jobs data to prevent December rate increase
•  BlackRock (Rieder, on Twitter)
  • Fed should hike in December, then two or three more times in 2018
  • “Economy and markets can handle it well!” MORE 
• State Street Global Markets (Lee Ferridge, phone interview)
  • “If we get Powell, but don’t get anything else tomorrow, I think the market would sell off a bit” referring to the dollar; speculation is that John Taylor could be announced as Trump’s pick for Vice Chair
  • The dollar recovery that’s been taking place in recent weeks is unsustainable because there are few bullish catalysts
  • FOMC statement Wednesday was as expected, Fed Governor Jerome Powell looks like top pick to be next central bank head, and U.S. tax cuts are unlikely to be passed this year
  • EUR/USD should strengthen toward 1.18-1.20 range into year-end; currently ~1.1621  

--With assistance from Alexandria Arnold, Brian Chappatta and Lananh Nguyen. To contact the reporter on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net Jenny Paris