The U.S. economy faces unprecedented risks from the coronavirus if fiscal and monetary policy makers don’t rise to the challenge, Federal Reserve Chair Jerome Powell said while pushing back against the notion of deploying negative interest rates.

“The recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems,” Powell said Wednesday in remarks to a virtual event hosted by the Peterson Institute for International Economics. “Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”

Powell and his colleagues on the policy-setting Federal Open Market Committee have taken dramatic measures to shelter the U.S. economy during the coronavirus pandemic. They have cut their benchmark interest rate to nearly zero, engaged in open-ended bond-buying and begun rolling out emergency lending programs as U.S. unemployment has soared to levels not seen since the 1930s Great Depression.

Amid such a dark outlook, some investors have bet the Fed might follow other central banks in taking rates into negative territory to spur spending, nudging futures markets to price in a slight chance it could happen. Powell acknowledged the speculation but said such a move was not being considered, though he stopped short of completely ruling the tool out as an option in the future.

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