Federal Reserve governor Frederic Mishkin set the stage for an aggressive monetary policy response by the US central bank to any fall in house prices in his presentation to the Jackson Hole symposium this weekend.

Mr Mishkin told fellow central bankers and top economists gathered for the annual retreat organised by the Kansas City Fed that policymakers should not wait until a decline in house prices leads to a fall in gross domestic product, but should "react immediately to the house price decline when they see it".