WASHINGTON (AP) — When Wall Street expects the Federal Reserve to cut interest rates, should that influence the Fed’s decisions?

Two Fed officials diverged on that issue in remarks Friday at a monetary policy conference in New York. The disagreement occurred just as the scenario is playing out in real life: Investors increasingly expect the Fed to cut its key short-term rate this year to help cushion whatever economic damage China’s viral outbreak ends up causing.

Still, other Fed officials have said in recent days that they see no need for rate cuts anytime soon.

Concerns about the consequences of the coronavirus rattled stock and bond markets Friday, particularly after a survey of purchasing managers by IHS Markit found that U.S. business output declined in February for the first time in more than six years. The Dow Jones Industrial Average shed 228 points, and the yield on the 30-year Treasury bond sank to a record low.

Those worries also drove up estimates in futures markets of a Fed rate cut later this year. According to the CME Group, traders envision a roughly 58% likelihood of at least one rate cut by June — up from less than 20% a month ago.

Last week, Chairman Jerome Powell reiterated that the Fed thinks the economy is in solid shape and is content with the current range of its benchmark rate, between 1.5% and 1.75%. That rate influences many consumer and business loans.

The gap between investor expectations for a rate cut and the policymakers’ own expectations has raised a longtime dilemma for the Fed: The central bank tries to guide markets about what it’s likely to do — or not do — in the months ahead. Yet it also considers signals from the markets about how the economy and the Fed’s rate policy are faring.

If the Fed were to ignore investor expectations for rate cuts, it could worsen market losses — particularly if the central bank turned out to be wrong in its economic assessments. On the other hand, if Fed officials were to tailor its policies mainly to satisfy traders, and against their own better judgment, that would risk inflating dangerous asset bubbles. Former Fed Chairman Ben Bernanke called it a “Hall of Mirrors” problem in a 2004 speech.

At Friday’s conference in New York, sponsored by the University of Chicago’s Booth School of Business, Loretta Mester, president of the Federal Reserve Bank of Cleveland, suggested that the Fed should listen closely to market signals.

Policymakers “should be open to reassessing their view of the economy based on all incoming information, including the views of participants in the financial markets,” Mester said. “We have to be open to the possibility that the markets’ view may be more in alignment with fundamentals than the policymakers’ view.”

Mester is a voting member this year on the Fed’s policy committee.

But Vice Chair Richard Clarida, speaking at the same conference, sought to underscore that the Fed assesses a broad range of economic metrics, particularly if those measures aren’t sending the same signal. Fed officials also study surveys of consumers and investors as well as economic models, he said.

“My colleagues and I do look at developments in asset markets but never in isolation and always in the context of balancing asset market signals with complementary signals from surveys and econometric models,” Clarida said.

In their prepared remarks, both Clarida and Mester spoke generally and did not address the impact of the coronavirus.

Separately, in an interview Thursday on CNBC, when asked about market expectations for a rate cut this year, Clarida countered by noting that a survey of economists by Bloomberg News found that a clear majority expected no cuts this year.

Regarding the economy, “the fundamentals are solid,” Clarida added.

Other Fed officials are also downplaying the damage the coronavirus will likely inflict on the U.S. economy, even as markets increasingly expect that the Fed will have to act.

“I think this is going to be a short-time hit; we’ll get the economy back to its usual level,” Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said in an interview Friday on CNBC. “I have no impulses really to think that we need to do anything with our policy stance different than what we are today.”

James Bullard, president of the St. Louis Federal Reserve, expressed a similar view in remarks earlier Friday.

But Danielle DiMartino Booth, CEO of Quill Intelligence and a former adviser to the Dallas Fed, said that financial markets have often proved better predictors of future rate cuts than Fed officials.

“They can talk as mean a game as they want, but when push comes to shove, the Fed has never gone against market expectations for rate hikes or rate cuts,” she said.