Investing.com -- Minneapolis Fed President Neel Kashkari on Wednesday backed the case for higher for longer interest rates after expressing uncertainty about how restrictive the current level of monetary policy is in the wake of more resilient than expected economy. 

"The biggest uncertainty in my mind is how much downward pressure is monetary policy putting on the economy ...  that's an unknown, we don't know for sure," Kashkari said Wednesday during a a moderated discussion at the 2024 Williston Basin Petroleum Conference in Bismarck, North Dakota. 

"That tells me we probably need to sit here for a while longer, until we figure out where underlying inflation is headed," he added. 

The current level of interest rates of 5.25% to 5.5% would normally be restrictive enough to slow the economy and inflation, but due pandemic-related distortions including a huge wave of fiscal spending, stimulus checks and other supportive measures have made the economy more resilience than the Fed had expected. 

"It seems like there is more resilience in the economy than I had expected," Kashkari added. Because of some of these dynamics, these interest rates only really mean we're putting one foot on the brake and not two." 

The remarks arrived just hours after the economic data showed the consumer price index slowed more than expected last month following three months of upside surprises. The slowdown in consumer prices came a day after a producer price inflation came in hotter than expected. 

But on the heels of the hot producer price report, a "cooler-than-expected consumer price report has immediately eased concerns of rapidly rising inflation, fueling investors’ hopes for rate cuts in the coming months," Stifel said in a Wednesday note.