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(Reuters) - The U.S. central bank must not keep interest rates too high much longer or it risks causing too much harm to employment, Atlanta Federal Reserve President Raphael Bostic said on Wednesday.

"We must not maintain a restrictive policy stance for too long," Bostic said in an essay released on the regional bank's website.

Waiting until inflation has actually fallen back to the Fed's 2% goal before reducing borrowing costs "would risk labor market disruptions that could inflict unnecessary pain and suffering," he said.

Bostic added that recent price increase reports had bolstered his confidence that inflation is now on a sustainable path to return to the Fed's objective, with pricing pressures diminishing quickly and broadly.

Fed Chair Jerome Powell has made it clear that the central bank intends to cut its benchmark interest rate from the current 5.25%-5.50% range, where it has been for more than a year, at its Sept 17-18 policy meeting. The only uncertainty is if weakening labor market conditions merit a quarter-percentage-point cut or a larger-than-normal half-percentage-point reduction.

The Fed is trying to engineer a so-called "soft landing" for the economy in which economic growth gradually slows, inflation returns to the 2% target and unemployment does not spike.

After being stung by higher-than-expected inflation in the first part of this year, the pace of annual price increases came down, by the Fed's preferred measure, to 2.5% in July.

Instead, attention has turned to a jump in the unemployment rate to near a three-year high of 4.3% in July, the fourth straight monthly rise in the jobless rate, amid increasing concerns that high borrowing costs may be dampening demand for labor too much.

Bostic said business contacts have mentioned a slowdown in hiring, but only a few have plans for layoffs.

"I do not sense a looming crash or panic among business contacts. However, the data and our grassroots feedback describe an economy and labor market losing momentum," Bostic said.

The Atlanta Fed chief also said it was too soon to declare victory over inflation and that he and his colleagues must remain vigilant.