WASHINGTON (Reuters) -The Federal Reserve now faces risks to both its inflation and jobs goals, with policymakers needing to balance which seems the more serious threat in deciding whether it is appropriate to reduce interest rates, St. Louis Fed President Alberto Musalem said on Friday.

Between tariffs pushing up prices and job growth slowing, "there are risks on both sides of our mandate, and when that happens, when you have risks on both sides, you have to take a balanced approach, which means you have to think about the likelihood of missing on each side of the mandate, the size of the potential miss, and how long that miss will be in place," Musalem said to an economic group in Mississippi. "That's the balancing act that we're doing right now."

Musalem, a voter on interest rate policy this year, did not say whether he feels the policy rate of interest should be reduced at the Fed's September 16-17 meeting. He voted in favor of keeping the policy rate steady in the current 4.25% to 4.5% range at the Fed meeting last week.

That meeting, however, was followed two days later by a jobs report that showed employment growth slowed in July and that far fewer jobs had been added in prior months than initially estimated. The unemployment rate rose.

Musalem said he still felt there was a risk the Trump administration's new import tariffs could lead to persistent inflation, but that the Fed now had to guard against an employment slowdown as well - a difficult situation for central bankers whose efforts to loosen or constrain the flow of credit in the economy can influence inflation and employment in opposing ways.

"It is likely that most of the impact of tariffs on inflation will be short lived and will fade...But there's a reasonable probability that there may be some persistence," Musalem said. "The labor market right now looks good," he said, but added that "growth has been lower than potential for the first half of the year, and is expected to continue along those lines for the second half of the year, and that poses risks to the labor market."

Investors expect the Fed to cut rates by a quarter of a percentage point in September and again in December. 

(Editing by Franklin Paul; Editing by Andrea Ricci)