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Fed's Powell warns cutting rates too soon could backfire

Central bank chief's remarks in line with markets' dialed-down expectations

Lowering interest rates too much or too soon could "ultimately require even tighter policy," Federal Reserve Chairman Jerome Powell told U.S. lawmakers on March 6.   © Reuters

NEW YORK -- Interest rate cuts are likely to come sometime this year, but the U.S. Federal Reserve wants to see more proof that inflation is cooling first, Fed Chairman Jerome Powell told lawmakers on Wednesday, warning of the risk of mistiming.

"If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," Powell said in prepared remarks to the House Financial Services Committee in Washington as part of the Fed's semi-annual congressional hearing on monetary policy.

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