It was bracing to hear Fed boss Jerome Powell admit this week that the Greenspan Put is kaput. When its namesake began propping up crisis-wracked markets in the late 1980s, the Fed quickly became risk-taker of last resort, making Maestro Alan the hero of Wall Street. Granted, this led to quick rebounds from the Black Monday crash, the early ‘90s junk bond and real estate downturns, the Mexican, Asian, and Long-Term Capital Management crises, the Dotcom bust and even 9/11. But when lenders and investors realized that the Fed would always bail them out, it created the “heads I win, tails you lose” ethos and moral hazard that set the stage for the Great Recession.

Powell finds himself in his current straits because the Fed broke with tradition and did not unwind the policies – low rates and massive asset purchases dubbed Quantitative Easing – that it implemented in response to the Great Recession. This was a crucial mistake, though perhaps an understandable one, especially after the Fed’s announcement that it would slow its pace of asset purchases in 2013 led to a market backlash dubbed the Taper Tantrum.

The Greenspan Put was a confidence building measure, more effective psychologically than economically. It was meant to spur markets to recover, not to force them. And while Powell and his predecessors have tweaked rates and QE here and there, the Fed still has its policy gas pedal stomped so far down there’s little it can do to accelerate the economy out of the next downturn. Worse, everyone knows it.

That’s why it seemed so extraordinary when Powell on Tuesday told the House Financial Services Committee, “The current low interest rate environment also means that it would be important for fiscal policy to help support the economy if it weakens.” This was like telling the markets that Santa Claus doesn’t exist. Bloomberg nailed the Fed’s predicament: “After three reductions last year, the Fed’s target for short-term interest rates now stands at 1.5% to 1.75%, less than half the 500 basis points in cuts it has made to fight past downturns.”

So much for market psychology. In fact, there’s a real risk of investors’ inner dialog becoming a self-destructive spiral: “If the Fed can’t step in, if the Greenspan Put no longer works, we have to rely on Trump’s Tammany-on-the-Potamac and the Congress that just impeached him to come up with TARP 2.0 or some kind of New New Deal? We’re doomed! Sell!”

Also, aside from the fact that fiscal policy is a political issue outside the ostensibly independent Fed’s mandate, it is no substitute for monetary policy. Fiscal policy acts more slowly, unevenly and uncertainly. Take the fiscal policy response to the Great Recession. In the immediate aftermath of Lehman Brothers’ collapse in September 2008, Congress approved the $700 billion Troubled Asset Relief Program, meant to stabilize the financial sector and spur economic activity.

But the effect was negligible. Banks used the government’s capital to buy back their shares at depressed prices, rather than to expand lending. The money for infrastructure mostly went to existing projects, instead of new ones that would have boosted employment and spending. Despite being used to bail out two of the big three US automakers, only about $430 billion in total was disbursed.

Despite the Great Recession, there are some Great Moderators still out there. Sixteen years after Ben Bernanke credited central bank wisdom with “taming the business cycle,” you can find people who believe that the Great Recession was just a regrettable blip in the economy’s Great Moderation, devised and directed by central bank wonks. It is encouraging that Powell does not. But he still has his work cut out for him.