Former Federal Reserve Chairman Paul Volcker said on Tuesday the U.S. housing market faced more losses and the world's biggest economy was now in recession.

Volcker, credited for battling double-digit inflation in the 1970s, said the priority for U.S. authorities in the credit crisis is to stabilize the financial system even though that means heavy government intrusion.

"The first priority is to stabilize the financial system. It is necessary even though the cost involved is heavy government intrusion in markets that should be private," he said in a speech at a seminar in Singapore.

"House prices in the U.S. are still declining. There are still more losses to come there. The economy, I believe, is in recession."

The United States has announced various measures to combat a credit crisis that emanated from the U.S. housing market and which has spread globally.

U.S. authorities are expected to announce plans later on Tuesday to pump $250 billion into the country's banks following similar concerted measures in Europe to revive money markets and stave off a global recession.

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