Jan Hatzius Households Quotations

We do believe that the U.S. housing market is a bubble in the sense that its contribution to consumer spending is unsustainable. Households have used a large share of the recent home equity gains to supplement their spending. When these gains dry up, as they ultimately must, spending is likely to weaken substantially.

I'm not sure which form it will take -- maybe a lengthy period of subdued consumer spending or something more violent than that. But it's clear to me that households cannot continue to save 3 percent of their disposable income and grow debt at 10 percent per year.