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(Bloomberg) — Federal Reserve Bank of Minneapolis President Neel Kashkari repeated the central financial institution probably must hold rates of interest on the present stage for “a while longer,” and questioned how a lot they’re restraining the US economic system.

“The biggest uncertainty in my mind is how much downward pressure is monetary policy putting on the economy,” Kashkari mentioned Wednesday at an occasion in Bismarck, North Dakota. “That’s an unknown — we don’t know for sure. And that tells me we probably need to sit here for a while longer until we figure out where underlying inflation is headed before we jump to any conclusions.”

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The Minneapolis Fed chief mentioned final week the central financial institution will probably hold rates of interest the place they’re “for an extended period of time.” Policymakers have stored rates of interest at their present stage — now a 23-year excessive — since July.

Fed officers have pushed out expectations for the primary charge minimize, emphasizing a have to hold borrowing prices elevated for longer amid disappointing inflation prints. Fresh information out Wednesday confirmed worth development excluding meals and vitality slowed for the primary time in six months in April.

Read More: US Inflation Ebbs for First Time in Six Months in Relief for Fed

Kashkari, who doesn’t vote on coverage this 12 months, mentioned he’s preserving an in depth eye on the housing market and its position in inflation. He additionally famous he had anticipated extra of an affect on the economic system given the present coverage charge and present mortgage charges.

“It seems like there’s more resilience in the economy than I had expected,” Kashkari mentioned. “So maybe because of some of these dynamics, these interest rates only really mean we’re putting one foot on the brake and not two.”

Investors at present count on about two charge cuts this 12 months, in line with futures markets. 

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