INSTANT VIEW - Bernanke warns U.S. economy under strain

NEW YORK (Reuters) - Federal Reserve Chairman Ben Bernanke warned on Monday that the U.S. economy remained under considerable strain and said that policy-makers must be ready to take decisive action to protect jobs and growth.

KEY POINTS: * "Our nation's economic policy must vigorously address the substantial risks to financial stability and economic growth that we face," Bernanke told the Greater Austin Chamber of Commerce in prepared remarks. * Bernanke said that further interest rate cuts beneath the Fed's current target of 1 percent for its benchmark overnight funds rate were "certainly feasible", but suggested the Fed would also use other unconventional measures to aid growth. * "Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve's quiver -- the provision of liquidity -- remains effective," he said.

COMMENTS:

FRANK LESH, FUTURES ANALYST, BROKER, FUTUREPATH TRADING LLC, CHICAGO:

"I didn't really think he told us a lot, but he reinforced the fact that things are looking pretty dire at the moment and the Fed will have to use all of their capabilities going forward including but not limited to future rate cuts. Things are still pretty dire and they are gonna pull out all the stops."

CARL BIRKELBACH, HEAD, BIRKELBACH MANAGEMENT, CHICAGO:

"I didn't see any new news here, from what I've heard and what I've seen. He indicated that we can't reduce interest rates much more, that's kind of a no-brainer.

"I didn't see anything inspiring out of the speech either. Bernanke and Paulson have this deadpan approach to presenting information where they seem to play down the positive. I suppose maybe that's part of their job, but in this kind of environment, with the markets down about 400 right now, it would be nice to see a little bit of cheer, but I didn't see anything particularly exciting or new.

"The market is continuing to go through a bottoming process. We seem to be getting higher highs and higher lows, and this is part of that process, since we've heard Obama speaking on his policies, there seems to be a change of attitude towards the positive, even though you have these setbacks. This is time to keep your head instead of losing it, I guess."