Institutions: Fed can do little to offset high uncertainty

The unusually high level of policy uncertainty that has disrupted financial markets this year has left the Federal Reserve powerless to address the problem and it has suffered itself, said Boivin, head of the BlackRock Investment Institute. He said Fed Chairman Jerome Powell emphasised this point several times in his policy statement on Wednesday, pointing to uncertainty as a reason for ‘(maintaining) policy inertia’. ‘We think it will be difficult for the Fed to cut rates more than once or twice this year - even if prolonged uncertainty begins to undermine otherwise healthy economic growth.’