One of the US most prominent economists warned on Saturday that the weak housing market could topple the United States into a full-blown recession and the Federal Reserve should slash interest rates aggressively.

According to Reuters, Martin Feldstein who warned of a "multiplier effect" from declining home prices and lower consumer spending, said a cut of as much as 100 basis points might be warranted.

The symposium, hosted by the Federal Reserve Bank of Kansas City in the Grand Teton mountains, is examining the implications of a meltdown in the U.S. subprime mortgage market for borrowers with risky credit.

Evidence the problems have spread to Europe and Australia has hit the availability of credit and roiled financial markets worldwide.