The Yankees promised patience with their young pitchers this season, but Kennedy was optioned to Triple-A after going 0-2 with an 8.37 ERA in six games, including five starts.
"I was kind of surprised," Kennedy said. "But it's bound to happen if you don't win, especially here."
The 23-year-old right-hander lasted 4 2/3 innings in his most recent outing Thursday night against Detroit and got little help from his defense while squandering a 3-0 lead. He was expected to fill a slot at the back of New York's rotation this year and acknowledged he was disappointed about being demoted.
"I just feel like I was making progress," said Kennedy, who went 1-0 with a 1.89 ERA in three starts for the Yankees late last season. "I know that I don't have as much confidence as I had last September."
Kennedy also knows he needs to throw more strikes, but said the scrutiny in New York has been tough.
"Analyzing every pitch doesn't help," he said. "You're on a bigger scale here."
The move opened a roster spot for Rasner, who started Sunday's series finale against the Seattle Mariners in place of injured Phil Hughes. The 27-year-old Rasner allowed two runs and five hits in six innings of an 8-2 victory, with four strikeouts and no walks.
The Yankees plan to give Rasner, 4-0 with a 0.87 ERA in five outings at Triple-A, another start Friday or Saturday in Detroit. Kei Igawa could be called up from Triple-A to pitch in that series as well.
"That's the way we're leaning right now," general manager Brian Cashman said.
Igawa is 3-3 with a 3.86 ERA in seven starts at Triple-A after beating Durham on Sunday. He has struck out 40 and walked 12.
The Yankees spent $46 million to bring him over from Japan before last season and the left-hander finished a disappointing 2-3 with a 6.25 ERA in 14 games, including 12 starts.
To make room for Rasner on the 40-man roster, the Yankees transferred reliever Brian Bruney (right foot) from the 15-day disabled list to the 60-day DL.
As for Kennedy, he hopes to be back in the big leagues soon.
"I'm early in this business. I guess this is normal," he said. "I think it's just one of those humps that every player goes through."
Kennedy has walked 20 and struck out 16 while allowing 28 hits in 23 2/3 innings this season. The Yankees said the length of his stay in the minors will simply depend on how well he pitches.
"To me, this is just a little detour in his career," manager Joe Girardi said. "He just needs to iron out some things."