Federal Reserve Chairman Alan Greenspan can only do so much to ease the pain of oil-price problems from the Persian Gulf crisis, analysts say.

He can cut interest rates a bit in hopes of stimulating the lagging economy, but he and his fellow monetary policymakers must move cautiously for fear of fueling inflation and scaring foreign investors away from U.S. securities, they say.Greenspan delivered a double message to the House Banking Committee on Wednesday. He acknowledged the oil shock had pushed the economy into what he called "a meaningful downturn."

At the same time, he warned, "There is no policy initiative that can in the end prevent the . . . cut in our standard of living that stems from higher prices for imported oil."

Consumers and businesses forced to pay more for gasoline and fuel oil will have less to spend on other goods and services, he said.

Economist David Jones of Aubrey G. Lanston & Co. Inc., a New York government securities dealer, said the Federal Reserve System is in a bind.

In the past month, it sought to pep up the economy by nudging short-term interest rates down by half a percentage point and, Jones said, it most likely will push them down an additional quarter point before Christmas.

To do more, however, could fuel inflation, already hit with the effects of higher oil prices. By making U.S. rates lower in comparison with foreign rates, it would also discourage Japanese and Europeans from buying the Treasury securities sold to finance the national debt.

"Greenspan came as close as a Fed chairman can come in suggesting that we are in a recession, but he also suggested the Fed (Federal Reserve System) is going to be very cautious in responding to it," Jones said.

Rep. Jim Leach, R-Iowa, suggested that now may be the best time to push down interest rates, even if it caused some inflation, because federal spending restrictions established in the recent budget deficit reduction agreement are blunting another source of inflation.

Greenspan responded, "The best thing to do is to try to craft a very stable policy which creates an environment in the long run that is not inflationary."