New York Fed President William Dudley on Tuesday encouraged homeowners to find “prudent” ways to tap into the equity that has built up in the homes, saying the boost in consumption would be a welcome shot-in-the-arm to the economy.

The shape of household finances was a hidden strength of the economy, he said.

“The good news is that, while the current expansion is quite old in chronological terms, it is still relatively young in terms of the health of household finances,” Dudley said in a speech to the National Retail Federation.

“Whatever the timing, a return to a reasonable pattern of home equity extraction would be a positive development for retailers, and would provide a boost to economic growth,” Dudley said.

Homeowners may have overlearned the lessons from the housing boom and bust, the New York Fed [resident said.

Even though home values have risen over 40% since 2012, housing debt has stayed virtually flat, he said.

“The previous behavior of using housing debt to finance other kinds of consumption seems to have completely disappeared,” and people are leaving the wealth generated by rising home prices “locked up” in their homes, he said.

For the first time since the recession, U.S. homeowners are beginning to withdraw some of their home equity to spend. Home-equity withdrawals were a major impetus to consumer spending before the recession.

In his speech, Dudley said economic conditions, especially prices, did not seem to warrant an aggressive response from the U.S. central bank.

“While economic shocks are, by their very nature, difficult to forecast, the risk that the Fed will snuff out the expansion anytime soon seems quite low because inflation is simply not a problem,” Dudley said.

One factor is the recent strengthening of the dollar, which will put downward pressure on import prices and limit the ability of U.S. firms to raise prices, he said.