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(Reuters) -Minneapolis Fed President Neel Kashkari said it was appropriate to discuss potentially cutting U.S. interest rates in September because of the rising possibility of a weakening labor market, the Wall Street Journal reported on Monday.

"The balance of risks has shifted, so the debate about potentially cutting rates in September is an appropriate one to have," Kashkari told the Journal in an interview.

Kashkari's comments come after St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic made remarks that gravitated toward an interest rate cut next month.

Kashkari said inflation was making progress but the labor market was showing "concerning signs," according to the Journal.

However, Kashkari said he did not see any reason to lower interest rates in increments of larger than a quarter percentage point because layoffs remained low and claims for unemployment benefits did not suggest a notable deterioration.

Investors, who were earlier betting the Fed would have to cut rates by half a percentage point at its Sept. 17-18 meeting following weaker-than-expected labor market data are now pricing in a roughly 75% probability of a quarter-percentage-point cut next month after encouraging data on inflation, jobless claims and retail sales.