By Howard Schneider and Ann Saphir

WASHINGTON (Reuters) -U.S. Federal Reserve policymakers said on Monday their large half-point rate cut last week was meant to try to sustain what they see as an emerging and healthy balance in the economy, with inflation headed towards the Fed's target rate and unemployment near the level consistent with stable prices.

In remarks this morning three reserve bank presidents said they supported last week's rate cut as an acknowledgement that current policy is putting too much pressure on the economy at a time when cost pressures are receding and risks to the job market rising - circumstances that would make a more "neutral" rate of interest appropriate.

Both inflation and unemployment levels are close to the Fed's goals, yet "rates are the highest they’ve been in decades. It makes sense to hold rates like this when you want to cool the economy, not when you want things to stay where they are," Chicago Fed President Austan Goolsbee said in remarks released on Monday.

"I am comfortable with a starting move like this - the 50 basis point cut in the federal funds rate announced last Wednesday - as a demarcation that we are back to thinking more about both sides of the mandate," Goolsbee added. "If we want a soft landing, we can't be behind the curve."

The dual mandate refers to the Fed's congressionally set goals of maintaining the lowest level of unemployment consistent with stable prices, which the central bank defines as an annual 2% increase in the Personal Consumption Expenditures price index.

The PCE on an annual basis was 2.5% as of July but is expected to continue slowing, a central point in discussion of whether the Fed might cut a half point again at its November meeting or scale back to a quarter point reduction.

PCE data for August will be released on Friday.

The current 4.2% unemployment rate as of August is at the level Fed policymakers at the median see as consistent with steady inflation.

Atlanta Fed President Raphael Bostic said he felt the economy was closing in on its "normal" level for both key statistics faster than he expected, and that monetary policy should adjust as well from the current tight credit stance.

The half-point cut last week was an appropriate way to kick off that process, he said, though the Fed needn't go on a "mad dash" to lower rates amid what he described as a "robust" discussion of how far and fast borrowing costs should decline.

"Progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer," said Bostic, a voter on rate policy this year, in comments to the European Economics and Financial Centre. "In this moment, I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago."