As MFA is enabled for user account, you have below two options while authenticating using
Connect-PnPOnline -Url https://******.sharepoint.com/ -Interactive
Use App Password for Office 365:
You can use App password in place of normal password to login easily.
I am using App Password for authentication in PowerShell as well as SharePoint Designer and it works well.
You can find more details in below threads:
- Connect-SPOService : The sign-in name or password does not match one in the Microsoft account system
- The sign-in name or password does not match one in the Microsoft account system
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