A “substantial correction” in the US housing market is under way but so far it has not had a big effect on the rest of the economy, the two top officials at the Federal Reserve said on Wednesday.

In separate remarks Ben Bernanke, the Fed chairman, and Don Kohn, the Fed vice-chairman, each said it was very difficult to predict what the ultimate impact of the housing slowdown on growth and consumption would be. They noted that new residential construction had already fallen sharply and housing weakness could spill over into other sectors in the months ahead.