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(Bloomberg) -- Fed Vice Chairman Stanley Fischer’s decision to step down effective mid-October will solidify President Trump’s control of the central bank’s leadership composition and make the Fed policy path in 2018 less certain, analysts wrote; risks of “policy discontinuity” have gone up, Evercore Vice Chairman Krishna Guha wrote in note.  

• USD accelerated declines after news that Fischer is resigning next month; Bloomberg Dollar Spot Index reached lowest since Aug. 29 before rebounding on plans for debt limit extension
• See MORE on Fischer’s resignation  
• Evercore (Guha)
  • Fischer’s resignation accelerates timeline by which Trump can reshape Fed leadership and increases policy uncertainty into 2018; uncertainty is “two-sided” and “may skew dovish rather than hawkish” for now, given Trump’s preference for low rates and a weak USD
  • Departure will “rob” next Fed chair of a “hugely respected and experienced” No. 2, and probably raises the influence of NY Fed’s Dudley and Fed Governor Powell as “figures of continuity” on FOMC; however, move shouldn’t change near-term policy dynamic on FOMC
  • While FOMC dots should drift lower across September and December, “a quite different set of dots may emerge” further ahead
• FTN (Chris Low)
  • Fischer’s resignation is “likely to wake traders to how effectively President Trump can transform the Federal Reserve”
  • By February, Trump will have the option to fill five of seven seats on the Fed board in Washington
  • Of the remaining governors, Lael Brainard is “a new thinker” and believes central bank must guard against tightening too quickly or risk permanently low inflation; she approaches policy much like Minneapolis Fed’s Neel Kashkari, “but with less snark and more intellectual heft”
• JP Morgan (Michael Feroli)
  • Fischer’s earlier-than-expected exit “only adds to the uncertainty” regarding Fed leadership in coming months
  • “At the margin, his absence may lower slightly the odds of a December hike”; however, data will be much more important
  • While resigning officials often won’t submit a dot at their last meeting, “there is no hard and fast rule”
• Keefe, Bruyette & Woods (Brian Gardner, Michael Michaud)  
  • Fischer’s announcement may slightly increase odds that Yellen is renominated to a second term; “stability and continuity will be Mr. Trump’s best friends” and renominating her “would be the most logical move” to further those goals 
  • Expect Trump to nominate “mainstream candidates who will be slow to raise interest rates”; he will “own” the Fed once he fills all five open seats on Fed board 
• Cowen & Co. (Jaret Seiberg)  
  • Fischer’s departure ensures Trump “can quickly gain control over the central bank” and gain a voting majority on the Fed board; this should help efforts to ease Dodd-Frank
  • Five of seven Fed board members could end up owing their jobs to Trump
  • Resignation of Fischer is “broadly positive” for large and regional banks
  • MORE

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: Boris Korby at bkorby1@bloomberg.net Greg Chang