(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said he wasn’t yet convinced that a surge in long-term Treasury yields would lessen the need for further rate hikes, saying it depends on what is driving the recent rise in borrowing costs.

“It’s certainly possible that higher long-term yields may do some of the work for us in terms of bringing inflation back down,” Kashkari said Tuesday during a town hall event hosted by Minot State University. 

“But if those higher long-term yields are higher because their expectations about what we’re going to do has changed, then we might actually need to follow through on their expectations in order to maintain those yields,” he added.

Three Fed officials have said in recent days that a rise in Treasury yields may lessen the need for further rate increases. Investors see a less than 20% chance of another quarter-point increase when policymakers meet again on Oct. 31 and Nov. 1, according to pricing in futures markets. 

“It’s hard for me to say definitively that because they moved, we don’t have to move,” Kashkari said. “I don’t know yet.”

The Minneapolis Fed chief, who votes on monetary policy decisions this year, said he wanted to see further inflation, labor-market and wage data “for me to get comfortable that we’ve actually done enough.”

Kashkari called the recent run-up in yields “perplexing,” and said it may be driven by growing optimism about the economy over the next five to 10 years or higher US government borrowing.

Another reason could be that markets expect the Fed to be more aggressive in its efforts to keep inflation in check over the next decade, but he said, “it’s hard to see that that would translate to me to 10-year yields being up as much as they are, so it’s a little bit of a head-scratcher.”

Kashkari also echoed remarks he made last month, when he placed 60% odds on the likelihood the Fed would raise rates once more this year and return inflation to its 2% target without causing severe damage to the economy. 

(Updates with additional Kashkari remarks in seventh paragraph.)

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