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But many private economists believe the central bank may keep rates unchanged all year, reflecting expectations that the economy will slow significantly.

In its January meeting, the USA central bank halted its plans for further rate hikes, adding that it would be "patient" on raising rates amid muted inflation and rising risks to global economic growth.

Amid signs of a global slowdown, the Fed chair said the US financial system is "so much more resilient and stronger than before the financial crisis", dampening concern that the USA will face another recession like 2008.

Pakistan said it downed the planes a day after Indian warplanes struck inside its territory for the first time since a war in 1971.

The Fed raised rates four times a year ago but put policy on pause last month.

Powell told lawmakers that the Fed is making its decisions on interest rates based on "our best thinking" and not political considerations.

In delivering the Fed's semiannual monetary report to Congress, Powell said the Fed will be "patient" in determining when to boost its benchmark policy rate in light of the various "crosscurrents and conflicting signals". "We will carefully monitor these issues as they evolve".

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The statement said Indian troops "retaliated for effect" and claimed to have destroyed five Pakistani posts. Meanwhile, on Wednesday, the IAF jet crashed in Naslapur area of Budgam district in Jammu and Kashmir .

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Although India managed to shoot down one Pakistani F-16, the Pakistani Air Force too managed to damage a MiG-21 bison of the IAF. Sources also said that there is no deal on to secure the release of the pilot.

Powell reiterated his claims from Tuesday's testimony in the Senate, when he said the economy is "healthy" and the outlook is "favorable" with muted inflation pressures and a strong labor market.

Minutes of the January 29-30 Federal Open Market Committee meeting, released on February 20, indicate that participants thought it would be "desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year". He said he would closely watch emerging risks, including a slowdown in growth in China, Europe and elsewhere, and a severe bout of instability that hit the stock market in the final three months of a year ago.

"Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier previous year", Powell said.

Amid the risks, Powell said that the solid increase in the past year in the proportion of Americans working or looking for work was very encouraging.

Investors are keeping an eye on the U.S. Trump charged that the Fed's string of rate hikes had triggered the big declines in stock prices and were a mistake because inflation was not a threat.

Powell said the Fed's policy decisions will depend on economic indicators and the future outlook.