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Keeping interest rates high for too long can endanger economic growth (

Aukštų palūkanų normų laikymas per ilgai gali kelti pavojų ekonomikos augimui (

Federal Reserve Chairman Jerome Powell on Tuesday expressed concern that keeping interest rates too high for too long could hurt economic growth.

In a two-day appearance on Capitol Hill this week, the central bank chief said the economy remains strong, as does the labor market, despite the recent cooling. Jerome Powell cited some slowdown in inflation, which he said is keeping policymakers determined to reduce it to the two percent target.

"At the same time, given the progress made in reducing inflation and cooling the labor market over the past two years, higher inflation is not the only risk we face." Easing policy constraints too late or too little could unduly dampen economic activity and employment," he said in prepared remarks.

The comment coincides with the approaching one-year anniversary of the Federal Open Market Committee's last increase in benchmark interest rates, which currently stand at 5.25-5.5 percent, the highest level in twenty-three years. This is the result of eleven consecutive hikes, after inflation reached its highest level since the early 1980s.

Markets expect the Fed to begin cutting interest rates in September, likely cutting another quarter of a percentage point by the end of the year. However, FOMC members indicated only one reduction at their meeting in June.

"Following a lack of progress towards the 2 percent inflation target earlier this year, the latest monthly readings point to little further progress." More good data would strengthen our confidence that inflation is moving sustainably toward 2 percent," Jerome Powell concluded.

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