The writer is president of Queens’ College, Cambridge, and an adviser to Allianz and Gramercy

“We don’t guess, we don’t speculate and we don’t assume.” That is what Jay Powell asserted last month when asked whether Federal Reserve officials incorporated into their policy thinking the plans of incoming president Donald Trump. Investors and economists are trying to figure out whether this is still true amid the unsettling market volatility that followed last week’s Fed policy announcements.

The inherent uncertainty over the answer to that question is just one way the Fed’s highly reactive policy approach amplifies financial volatility. The reaction of longer-term bond yields also helps explain why Americans find it confusing that just when the media tells them that the central bank has cut interest rates, the cost of the mortgages they are looking at increases.