The overall economy is at risk of “a more significant downturn” from “the continued decline in residential investment,” Federal Reserve Bank of Boston president Eric S. Rosengren said yesterday.

“Falling housing prices further weaken the incentives for residential investment, but are also likely to dampen consumer and business confidence and spending,” according to text of a speech he delivered to the Connecticut Business and Industry Association and released by the Fed. “Furthermore, falling house prices roil financial markets and financial institutions by exacerbating exposures to the housing market.”

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