The first thing we'd say is that this verse poses no threat to...

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We know from other passages in Paul that salvation also has present and future aspects, so the kind of salvation Paul is discussing in Ephesians 2:8-9 is initial salvation. It is the kind which we received when we first came to God and were justified, not the kind of salvation we are now receiving (cf. 1 Peter 1:8-9, Phil. 2:12) or the kind we will one day receive (cf. Rom. 13:11, 1 Cor. 3:15, 5:5).
The Council of Trent states: “We are said to be justified by grace because nothing that precedes justification, whether faith or works, merits the grace of justification. For ‘if it is by grace, it is no longer by works; otherwise,’ as the apostle says, ‘grace is no more grace’ [Rom. 11:6]” (Decree on Justification 8).
However, Paul probably does not mean “good works.” Normally when he says “works,” he means “works of the Law.” His point is to stress that we are saved by faith in Jesus Christ, not by obeying the Mosaic Law. Jews have no ability to boast in front of Gentiles of having a privileged relationship with God just because they keep the Mosaic Law and its requirement of circumcision (cf. Romans 2:6-11, 17-21, 25-29, 3:21-22, 27-30).
These same elements—works, boasting, circumcision, and the Jewish/Gentile distinction—are present in Ephesians 2. Paul discusses how Jews and Gentiles are united together in the body of Christ and mentions works in connection with boasting, before turning to the whole subject of circumcision and membership in Christ:
The apostle then turns our attention away from works of the Mosaic Law and toward the kind of works a Christian should be interested in—good works: “For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them” (Eph. 2:10).
However, the Protestant view encounters difficulties with James 2:24. Protestants are known for their slogan stating that we are justified by “faith alone,” but the expression “faith alone” only appears once in the Bible—in James 2:24-where it is rejected.

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