Rivlin, Holtz-Eakin: Little more Fed can do to boost economy

There is little more the Federal Reserve can do to boost the economy, but it is well-positioned to act should another fiscal crisis develop, two leading economists cautioned Sunday.

"The Fed has a big problem right now as to whether there's anything else they can do to help the economy along," Alice Rivlin, White House budget chief under President Bill Clinton said.

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“Federal Reserve Chairman Ben Bernanke has said, ‘We lowered interest rates. We bought a lot of government bonds,’" Rivlin said on CNN's "State of the Union."

"The one thing they're talking about now is can they rebalance their portfolio, as it were, to roll off the short term bonds as they come due, and invest in long-term bonds," she said. "That's called 'the twist.' And all it would mean is they use the powers that they have, because they have a very big portfolio, to put a little downward pressure on long-term interest rates."

Douglas Holtz-Eakin, a former Congressional Budget Office director and adviser to Sen. John McCain's (R-Ariz.) 2008 presidential campaign, agreed.

"There's really not much the Fed can do to push the economy along faster," Holtz-Eakin said. "It is still well positioned if something bad happens. You worry about Europe. It can step in if things start to spill over to the U.S., something goes wrong here. They're well positioned for that."