Federal Reserve Bank of Minneapolis President Neel Kashkari has pushed back against worries over rising U.S. Treasury yields, asserting that the market is functioning well and that the recent surge is unlikely to influence monetary policy decisions.

In a Sunday interview, Kashkari stated that all indications point to the U.S. Treasury market operating normally, with transactions executing smoothly and ample liquidity available. He emphasized that this allows policymakers to keep their focus on the federal funds rate as the primary tool for reducing inflation.

Treasury yields moved higher across the board last week, with the benchmark 10-year note closing around 4.73%. Meanwhile, the 30-year bond yield remained near its highest level since 2007.

While acknowledging that current yields are elevated compared to recent history, Kashkari noted they were significantly higher during the 1990s.

Federal Reserve officials are scheduled to convene next in September. At their July meeting, they voted to hold interest rates steady for a fifth consecutive time. Kashkari was among three officials who dissented from that decision, advocating instead for a 25-basis-point rate increase.

He reiterated those concerns on Sunday but stopped short of explicitly calling for another rate hike in September.

He said more data is needed and that he does not want to pre-judge the outcome of the upcoming meeting. However, he expressed uncertainty that inflation will return to target levels in the near term.

Investors this week will be closely watching new Fed Chair Kevin Warsh, who is set to deliver the keynote address Friday at the central bank's annual symposium in Jackson Hole, Wyoming.