(Bloomberg) -- U.S. Treasury Secretary Steven Mnuchin said he sees no need to boost coordination between the government and the Federal Reserve, rebuffing investors who’ve called for more cooperation as central bankers run out of tools to counter the next recession.

JPMorgan Chase & Co.’s Jamie Dimon, BlackRock Inc. and former central bankers are among those who’ve advocated for more explicit cooperation between the Fed and the government.

“I don’t agree that there necessarily should be coordinated action,” Mnuchin said in an interview on the sidelines of a meeting of the Group of 20 finance ministers and central bankers in Riyadh. “I don’t believe that there needs to be defined coordination or there needs to be defined independence.”

Mnuchin has kept up the long-held tradition of weekly meetings between Treasury secretaries and Fed chairs. For now, his talks with Jerome Powell will continue as they always have, the Treasury chief said.

But investors are concerned that the decade-long U.S. economic expansion may be coming to an end and that the Fed, with interest rates held near record lows, won’t be able to respond to the next recession. Yields on 30-year Treasuries fell to a record low last week, in part reflecting those worries.“When interest rates are lower, just by definition there’s less room for central banks to move,” Mnuchin said. “It’s not a big concern of mine. It’s a bigger concern to the Europeans.”

Central-Bank ‘Trap’

Even with unemployment at a 50-year low and surging stock prices to end 2019, American recession fears are inching higher amid persistent manufacturing weakness and softer hiring momentum.

The low federal funds rate leaves the Fed with less room to stimulate the economy if any shocks — such as the spread of coronavirus — threaten the expansion. The Fed has said that the epidemic presents a “new risk” to the U.S. economic outlook and warned of disruptions in global markets.

The International Monetary Fund’s main scenario is for China’s economy to expand 5.6% this year, 0.4 percentage point less than forecast in the IMF’s January outlook, and for the virus outbreak to shave 0.1 percentage point off global growth.

JPMorgan’s Dimon has said fiscal and monetary policy makers will need to do more together in the future.“We have to have coordinated fiscal, monetary policy and regulatory policy,” Dimon told CNBC last month. “It’s very hard for central banks to forever make up for bad policy elsewhere and that puts them in a trap and we are a little bit in that trap today.”

Stanley Fisher, a former Federal Reserve vice chairman and former governor of the Bank of Israel who’s now a senior adviser at BlackRock Inc., has also advocated for a signal to investors that there’s planning underway for coordination between fiscal and monetary policy makers.

Richmond Fed President Thomas Barkin said last week that with the lower bound of the federal funds rate close to zero, coordination is “an important conversation for us to put on the table.”

“It’s worth reflecting on whether we have the tools as a country to bring us together in a downturn,” Barkin said.

To contact the reporter on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Benjamin Harvey

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