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Cannot connect to Dataverse with Power Platform Tools for VS 2022

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Posted on by 10
When trying to connect to Dataverse by using Power Platform Tools for Visual Studio 2022, following error is thrown:
{/error/: /interaction_required/,/error_description/: /AADSTS50076: Due to a configuration change made by your administrator, or because you moved to a new location, you must use multi-factor authentication to access '00000007-0000-0000-c000-000000000000'. Trace ID: 41800f48-5c3b-4b9f-b22d-67b0b8808500 Correlation ID: 5a32c1e1-6e2f-4e99-99ce-aa989f253f0a Timestamp: 2024-03-01 10:49:08Z/,/error_codes/: [50076],/timestamp/: /2024-03-01 10:49:08Z/,/trace_id/: /41800f48-5c3b-4b9f-b22d-67b0b8808500/,/correlation_id/: /5a32c1e1-6e2f-4e99-99ce-aa989f253f0a/,/error_uri/:,/suberror/: /basic_action/}
A few days ago connection was working also with MFA enabled user. How can this be solved?