The weak housing sector continues to pose a strong headwind to the U.S. economic recovery, and the Federal Reserve could potentially do more to drive down mortgage rates to support the sector, an influential Federal Reserve official said on Monday.

William Dudley, president of the New York Federal Reserve Bank, said another round of quantitative easing, or QE3, is one possible option the U.S. central bank has to boost the slow recovery. "I don't think the Fed has run out of bullets," he said. See the full story at