Shown in 2017, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, spoke at the Barclays-CEPR International Monetary Policy Forum in London on Tuesday. (Shari L. Gross/The Minnesota Star Tribune)

The Federal Reserve has made no secret of its plan to keep interest rates higher as it seeks to tame inflation coming out of the COVID-19 pandemic, but it’s now looking like rates could stay higher for much longer than anticipated.

Despite the Fed’s efforts to pump the brakes on the U.S. economy by holding interest rates at 5.25% to 5.5% since July, indicators of economic health — including consumption, housing and the labor market — have stayed strong, Minneapolis Fed President Neel Kashkari said Tuesday at the Barclays-CEPR International Monetary Policy Forum in London.

“Where is the imprint of this tight monetary policy on the real economy?” he said. “That’s what is harder to see.”

Kashkari has said rate cuts might not happen this year despite Fed officials predicting at the end of 2023 that the Fed would make multiple cuts in 2024. With core personal consumption expenditures (PCE) inflation expected to remain above the Fed’s 2% target this year — at more than 2.5% — Kashkari said he could see the current rates “sitting here for an indefinite period of time.”

The central bank’s actions have wide-ranging implications for U.S. consumers, making debt more expensive at a time when delinquency rates are mounting. There are also global implications, which economists and bankers who appeared on a panel alongside Kashkari emphasized Tuesday.

The Fed tends to take the lead on monetary policy with the European Central Bank (ECB) following, though Europe is expecting multiple rate cuts this year.

“We both have a domestic mandate, and we have to focus on our own inflation outlook,” panelist Klaas Knot, the Dutch Central Bank president, said. “But clearly, monetary policy always takes places in a global context because there are global spillovers.”

Europe’s pandemic recovery hasn’t featured the productivity gains the U.S. has seen. The continent also faces geopolitical stressors like the war in Ukraine and “more autocrats that have geopolitical ambitions,” Knot said.

The Fed has an eye on global dynamics, Kashkari said, but will still keep its focus domestic. He noted “big losses” expected in the U.S. commercial real estate sector.

“We pay attention to the rest of the world because the rest of the world matters to the U.S.,” Kashkari said. “But ultimately, we are accountable to our government just as the ECB is accountable to [Europe].”