The Federal Reserve recently suggested it will keep interest rates near-zero through 2023 as the U.S. economy weathers the effects of the ongoing coronavirus pandemic.

But, at least so far, the Fed hasn’t gone into negative interest rate territory, an unconventional monetary policy deployed by the Bank of Japan and the European Central Bank that charges banks to deposit their excess cash and entices borrowers to take out loans because they’ll have to pay back less money than they took out.

In a new interview with Yahoo Finance that aired as part of its All Markets Summit, Citigroup (C) CEO Michael Corbat said negative interest rates would not be “the best place to go.”

“I would argue ... the transmission mechanism of negative rates isn’t necessarily that effective in the places where we’ve seen it. I think it creates strange behaviors, it creates strange bubbles. And I would say, you know, hasn't in totality been all that successful,” Corbat told Yahoo Finance on Oct. 15.

The comments from Corbat echo concerns that negative interest rates fuel housing bubbles by enticing borrowers to take out mortgages they never could have afforded with higher rates. In an August 2019 column, Yahoo Finance Editor-in-Chief Andy Serwer called negative interest rates “downright terrifying.”

“It’s really unusual and really distorting the global financial system,” economist Torsten Slok told Serwer at the time. “I spend all my time talking about it.”

‘Other tools in the tool box’

The verdict is starting to come in regarding the effectiveness of negative rates. Last month, the Federal Reserve Bank of San Francisco published a report showing that negative rates hurt both bank profits and the ability to lend because of banks’ reluctance to charge consumers just for keeping cash in their accounts.

See also: Citi ‘will be prepared for contested 2020 election’: CEO Michael Corbat

In May, Fed Chair Jerome Powell reiterated that the central bank is not considering negative rates, though President Donald Trump said that same month that he firmly believes the U.S. central bank should impose negative rates.

“I think what I've heard as Chair Powell has spoken is a reluctance to go there,” Corbat said. “And I think, kind of feeling that there's maybe some other tools in the tool box that could be more effective.”

The Fed has already used a number of tools, or “bazookas,” that do not involve zero interest rates, such as quantitative easing (QE) and an alphabet soup of liquidity facilities, as Yahoo Finance’s Brian Cheung has reported.

“We're in unprecedented times, and I think that we should continue to think and act creatively in terms of how we attack this. And for me, negative rates is probably not from what we've seen, the next or best place to go,” Corbat said.

See also: Citi CEO Corbat: US economy ‘performed better’ than expected amid COVID-19

In Japan, the central bank has responded to the coronavirus by offering hundreds of millions in bonuses to banks — a move that analysts told Reuters was meant to counteract side-effects of negative interest rates.

“This is one of the most effective policy moves the BOJ has made in recent years,” Takehiro Noguchi, senior economist at Mizuho Research told Reuters in August.

“The BOJ will likely continue to take steps to alleviate the side-effect of its monetary easing... The BOJ thinks negative interest rates is something it should not have done.”

Erin Fuchs is deputy managing editor at Yahoo Finance.

Read more from the All Markets Summit:

Bill Gates on COVID-19: ‘Fall 2021 won’t be completely back to normal’

XFL co-owner Dany Garcia shares secret to working with ex-husband Dwayne ‘The Rock’ Johnson

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Find live stock market quotes and the latest business and finance news

For tutorials and information on investing and trading stocks, check out Cashay