William C. Dudley, who was formerly president of the Federal Reserve Bank of New York, is sympathetic to the idea of a municipal bond program of some sort, especially given that “they basically have the blessing of Congress.” But he said officials should stick to investment-grade debt.

“Once you start to get below investment grade, it gets a lot trickier — you’re taking on a lot more risk, and where does it end?” Mr. Dudley said. The central bank might end up with riskier bonds that investors are offloading because the debt is unlikely to be paid back.

Lawmakers are leading the push for Fed action. The new legislation insists that Treasury Secretary Steven Mnuchin push for an emergency lending program related to state and local finance, though it’s fuzzy on the details. Speaker Nancy Pelosi, Democrat of California, has said repeatedly that she’s urged Jerome H. Powell, the Fed chair, to do more to help municipal markets.

Senator Elizabeth Warren, Democrat of Massachusetts, urged Mr. Powell and Mr. Mnuchin in a Tuesday letter to “address the needs of state and municipal governments that face desperate budget shortfalls” and do so “rapidly.”

After legislation passed empowering the Fed with more financial backing for emergency lending, which it would use to snap up the municipal bonds, the market for outstanding local bonds temporarily calmed. But volatility returned on Wednesday.

“Liquidity is the most critical piece right now,” said Deborah Goldberg, who is Massachusetts’ treasurer and who has been pushing the Fed to get involved.

The message from the Fed and the Treasury has been, consistently, that it is a work in progress.

“We’ll be looking at programs for state and local governments,” Mr. Mnuchin said in a CNBC interview Wednesday. “I can assure you, Jay Powell and I are working around the clock at providing liquidity into the economy.”

Mary Williams Walsh and Alan Rappeport contributed reporting.

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