As they prepare to open a two-day meeting Tuesday, Federal Reserve policymakers are weighing whether to launch new programs or expand existing ones to spur lending, get Americans spending again and lift the country out of recession.
Any decisions would come Wednesday.
To try to revive the economy, Fed Chairman Ben Bernanke and his colleagues already have slashed a key lending rate to banks to a record low.
Economists predict the Fed will leave that rate near zero at this week's meeting and probably through the rest of the year.
The financial crisis has thrown millions of Americans out of work and forced a growing number of banks out of business.
The Fed's efforts have helped ease some credit and financial stresses. But those markets are still far from operating normally, Bernanke and other Fed officials have acknowledged.
"The world is suffering through the worst financial crisis since the 1930s," Bernanke said in a speech last week.
"Until we stabilize the financial system, a sustainable economic recovery will remain out of reach." But the Fed chairman does believe America's recession "probably" will end this year if the government does succeed in bolstering the banking system.
In a taped interview with CBS' "60 Minutes" on Sunday, Bernanke seemed to express a bit more optimism that this could be done, and said the U.S. has averted the risk of plunging into a depression.
But he noted that even if the recession ends this year, the unemployment rate will keep climbing past the current quarter-century high of 8.1 percent.
And he warned that one of the biggest potential dangers the nation faces is a lack of "political will" to solve the financial crisis.
Bernanke and his colleagues have pledged to use "all available tools" to battle the crisis and revive the economy.
One option advanced at its last meeting in January is buying long-term Treasury securities. Doing so would help further drive down mortgage rates and help the crippled housing market, economists said.
Another option put forward in January is expanding a Fed program aimed at bolstering the mortgage market.
The Fed could boost its purchases of debt issued or guaranteed by mortgage giants Fannie Mae and Freddie Mac. Since that program was announced late last year, mortgage rates have fallen.
Average rates on 30-year mortgages are now 5.03 percent, down from 6.13 percent a year ago, according to Freddie Mac.
The recession, in its second year and already the longest in a quarter-century, has turned out to be more severe than the Fed had anticipated, Bernanke conceded last week: "My forecasting record on this recession is about the same as the win-loss record of the Washington Nationals."
Even as the Fed pledges to use all tools to battle the crisis, it's mindful of the risks of pumping more money into the economy, bailing out financial institutions and leaving a key rate near zero for too long.
Those steps could ignite inflation, put ever-more taxpayers' money in danger and encourage companies to make high-stake gambles, confident the government stands ready to rescue them.
Against that backdrop, some economists say the Fed won't announce any new policy actions Wednesday but instead will hold them in reserve should the economy or financial markets take a turn for the worse.
"The Fed is going to want to keep some of its powder dry," said Richard Yamarone, economist at Argus Research.
"They are going to wait to see the whites of the eyes of doom and gloom before they roll out a new program or expand other ones." Much is riding on a new program, created by the Fed and the Treasury Department, to spur lending for auto, education, credit card and other consumer loans.
The Fed later this month will start providing up to $200 billion in financing to investors to buy up such debt. The program could generate up to $1 trillion of lending for businesses and households, the government says.
It will be expanded to include commercial real estate, though that component won't be part of the initial rollout.