Central banks may be getting ahead of themselves if they cut interest rates to quell coronavirus fears, according to a former U.S. envoy to Canada.

“It uses up bullets that you may want to use in the future, where they might have more impact later,” Bruce Heyman, the former U.S. ambassador to Canada, told BNN Bloomberg in an interview on Monday.

Heyman – whose ambassadorial tenure lasted for nearly three years under former U.S. president Barack Obama – said while cuts may benefit some investors, it would not have the kind of broad impact that the central banks may be intending.

“There are plenty of people who will look for the ability to refinance mortgages or carry credit card debt, or other types of debt that are floating and [they] will benefit from this,” Heyman said. “But, for the most part, I don’t think it will have the same stimulative effect that it would have under normal circumstances.”

Heyman, who also served as a vice-president at Goldman Sachs from 1985 to 1999, added that the U.S. Federal Reserve, in particular, will run into difficulties in regards to its own balance sheet and its ability to prevent panic among those its moves are designed to help.

“The balance sheet’s kind of full, the rates are fairly low, and then if you look on the fiscal side (in the U.S.) we’re running huge deficits now, at this part of the cycle. We don’t really have a lot of powder dry there either,” he said.

“The question then is: Are the traditional things we do actually able to stimulate demand when people are fearful and locked in their home, or in quarantine.”

Heyman said that uncertainty has already crept into the market in terms of the major declines seen last week not only in the Dow Jones Industrial Average and the S&P 500 indices, but declining yields in the one- and two-year U.S. Treasury bonds.

“That’s why the market was so difficult last week. Now the market is rallying today in anticipation of stimulus,” he said, but pointed to falling treasury yields as “indicative of the market looking for not only easing, but a slowdown.”

The Bank of Canada is scheduled to make its next interest rate announcement on Wednesday.