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STORY: Powell said Fed policymakers would "proceed carefully as we decide whether to tighten further," but also made clear that the central bank has not yet concluded that its benchmark interest rate is high enough to be sure that inflation returns to the 2% target.

"It is the Fed’s job to bring inflation down to our 2% goal, and we will do so," Powell said. "We have tightened policy significantly over the past year. Although inflation has moved down from its peak -- a welcome development -- it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."