rose from around 2 - 1 / 2 percent in 2006 to about 5 percent in the first half of this year. it now appears that consumer spending is advancing at a moderate pace. in the pre - crisis years, consumer spending grew rapidly, providing considerable impetus to the expansion. in contrast, over the next few years, consumer spending seems unlikely to serve as one of the main engines of growth. the ratio of household debt - to - income remains exceptionally high, even though over the past few years it has declined slightly from the post - world war ii peak reached prior to the crisis. although households appear to have made some progress in deleveraging, many still face elevated debt burdens and reduced access to credit. moreover, high levels of unemployment and underemployment, slow gains in wages, and declines in the values of both homes and financial assets have weighed on household spending and diminished the ability of households to tap home equity in emergencies or for other purposes. consumer sentiment dropped markedly over the summer and remains quite depressed, apparently reflecting households ’ concerns about the broader economy as well as their own financial situations. a sharp downturn in housing was at the core of the previous recession, and this sector continues to weigh on the recovery. robust increases in housing activity have helped spur recoveries from most u. s. recessions since world war ii. this time, in contrast, residential construction remains depressed by a large inventory of foreclosed and distressed properties either currently available for purchase or probably soon to become so, tight credit conditions for construction loans and mortgages, and concerns about the possibility of further declines in home prices. as a result, new home construction currently is at only about one - third of its average pace in recent decades. in addition, homeowners with insufficient equity in their homes have found it difficult to take advantage of today ’ s low interest rates by refinancing their mortgages. recently announced changes to the federal government ’ s home affordable refinance program, or harp, are designed to improve the opportunity for homeowners to refinance and i ’ m hopeful this program will succeed in reducing household debt service burdens and the flow of foreclosures. more generally, i see a strong case for additional policies to foster more - rapid recovery in the housing sector. indeed, to provide greater support for mortgage markets, the federal reserve recently adjusted its program for reinvesting its securities holdings. the federal reserve continues to provide highly accommoda

after the new president takes office, if past experience is any guide to the time it takes to make appointments and get them through the confirmation process. a practice in the senate called a “ hold ” allows a member - through his or her majority or minority leader and without exposing his or her identity - to hold up, virtually indefinitely, a vote on a nomination to the federal reserve board or any other government position that requires confirmation by the senate. i have first - hand knowledge of this practice, since a hold delayed the confirmation of my nomination for several months. actually, the hold was applied to the renomination of the chairman, but the nominations of myself and alice rivlin as governors were viewed as part of a package and therefore action on all the nominations was delayed. even without a formal hold, the chairman of the relevant committee has discretion on whether or not to begin the confirmation process because the chairman controls the scheduling of a hearing. to balance inflation and stabilisation objectives, as is the implicit contract under a regime under which the congress has delegated instrument independence to the federal reserve. outstanding issues related to independence and accountability in my judgment, the federal reserve act - together with the policymaking structure as amended by the banking act of 1935, the policy mandate as introduced in 1977 and 1978, and the informal relationships that have evolved - results in an excellent balance of independence and accountability for the federal reserve. nevertheless, the resulting balance offers opportunities for political influence so that sustaining federal reserve independence in practice depends on building a tradition of independence within the federal reserve and on the strength of will and public prestige of chairmen, in particular, but also of other fomc members, in resisting efforts at political control. also, controversies linger about whether or not the policy mandate should be refined and whether transparency and disclosure should be further enhanced. the legislative mandate under which the federal reserve operates is, as i noted earlier, different from the mandate applied to most other central banks. it explicitly sets out a dual mandate and, should there be short - run conflicts, does not identify any priority between the two objectives. there has long been a small group in the congress who would like to revise the language related to the policy mandate to elevate the role of price stability to the single or at least principal objective for monetary policy. they press this issue not out of dissatisfaction with the conduct of monetary policy but because they believe such a revised policy mandate would strengthen the credibility of the federal reserve ’ s commitment to