(Reuters) - Federal Reserve Bank of Chicago President Austan Goolsbee on Monday said he expects "many more rate cuts over the next year" as the U.S. central bank seeks a soft landing for the economy, where it controls inflation without crashing the labor market.

Inflation is "way down" from its peak and in recent months has been coming in at the Fed's 2% target, Goolsbee said in remarks prepared for delivery to the National Association of State Treasurers Annual Conference.

He said the 4.2% U.S. unemployment rate is considered by many to be full employment, which is the Fed's other congressionally mandated goal.

"Basically, we would love to freeze both sides of the Fed’s dual mandate right here," Goolsbee said. "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."

The Fed last week reduced its policy rate to the 4.75%-5.00% range, delivering a bigger-than-usual half-of-a-percentage point cut.

"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 said on Monday. "If we want a soft landing, we can't be behind the curve."

As Fed policymakers have gained confidence inflation is headed back to 2%, he said, it's appropriate "to think about risks to employment, too, not just inflation... and that likely means many more rate cuts over the next year."

Goolsbee has for months advocated reducing the Fed's policy rate, which the central bank had held steady for more than a year even as inflation dropped substantially.

"The specific timing of the initial cut is less important than the longer-arc view that conditions are good on both sides of the mandate," Goolsbee said on Monday. "Rates need to come down significantly going forward if we want the conditions to stay that way."

(Reporting by Ann Saphir; Editing by Shri Navaratnam)