FED MONITORING EUROPE'S RISKS

Federal Reserve Chairman, Ben Bernanke, said on Thursday that the central bank was ready to shield the ecoomy if financial troubles mount but offered few hints that further monetary stimulus was imminent. Bernanke told Congress the Fed was closely monitoring significant risks to the U.S. recovery from Europe's debt crisis but struck a decidedly different tone from the central bank's No. 2 official, who argued for monetary support on Wednesday. For investor hungry for clues about the prospect for a third round of Fed bond buys, Bernnake's testimony disappointed. Slowing U.S. job creation, evident in surprisingly weak employment data last Friday, and an escalation in the eurozone's crisis had raised expectations of Fed action. Yet Bernanke's tone was far from crisis mode. "Economic growth appears poised to continue at a moderate pace over the coming quarter' he said. "Despit economic difficulties in Europe, the demand for U.S. exports held up well. Fed Vice Chair, Janet Yellen, made the case on Wednesday for acting before the economy worsened, perhaps through Bond purchases. Bernanke made no such suggestion although he told legislators that tighter U.S. fiscal policies set to kick in early next year baring congressonal action "would, if allowed to occur, pose a significant threat to the recover." Stay tuned.....