Progress on the U.S. economic slowdown and housing sector have been encouraging, according to U.S. Treasury Undersecretary Robert Steel, speaking to Society of American Business Editors and Writers Annual Conference in Baltimore, Maryland.

"Our economy today has slowed after a period of very strong economic growth. Just last fall, GDP growth in the third quarter was 4.9 percent," Steel said.

"Since then energy prices, housing correction, and credit contraction have created substantial economic headwinds. The Administration is focused on easing the housing correction and providing an economic stimulus. We are also focused on longer term improvements, such as enhanced market discipline and modernized regulatory policies," he added.

Nevertheless, the housing sector remains the largest downside risk to the U.S., which should continue to see challenges in the future.

By Erik Kevin Franco and edited by Nancy Girgis