UPDATE 1-Kohn says Fed not automatically destined to ease

(Adds details from interview, background)

WASHINGTON, Sept 1 (Reuters) - The Federal Reserve's decision to reinvest proceeds from maturing securities it holds is not an "automatic" precursor to further monetary easing, a top Fed official said on Wednesday.

Fed Governor Donald Kohn, on his final day in office, told CNBC television that shifts in the economic outlook would determine the U.S. central bank's policy course.

"Certainly there's nothing automatic leading from that (decision) to further quantitative easing to come," Kohn said, according to a transcript provided by CNBC.

"I think the fact that we did that was suggestive of a deterioration in the overall economic outlook," he said in discussing the Fed's August 10 decision.

Kohn, whose term as Fed vice chairman expired on June 23, said it would not have been appropriate to let monetary policy tighten in "any way shape, or form" at a time economic conditions were weakening. If the Fed had continued to let securities roll off its balance sheet, it would have represented a slow tightening of policy.

The Fed has held overnight interest rates close to zero since December 2008. In addition, it bought more than $1.7 trillion dollars in mortgage-related debt and longer-term U.S. Treasury securities in a further attempt to spur the economy.

The 40-year veteran of the central bank said his colleagues would look to see whether the economic forecast is deteriorating further as they set the future course of monetary policy.

Kohn said if he had remained at the central bank, he would support further easing if progress were not being made toward the Fed's twin goals of price stability and maximum employment.

While progress is not being made now, he said he concurred with Fed Chairman Ben Bernanke's assessment that economic growth will pick up next year.

"I don't think I'd be on a hair trigger," Kohn said. "I would want to look very carefully at how strong, what the prospects were." (Reporting by Tim Ahmann; Editing by Phil Berlowitz and Carol Bishopric)