Chicago Fed President Charles Evans on Wednesday said the U.S. central bank should "continue to cautiously probe for the true level of maximum employment" in the United States, even though the current 3.5% unemployment rate is below most levels of a sustainable rate.

"We shouldn’t treat a statistical estimate of the natural rate as a hard barrier that automatically signals an impending problem," Evans said at the start of an event at the Chicago Fed designed to get public input on the state of the labor market and how the Fed ought to go about achieving its mandates of full employment and stable prices.

"Of course, we should also be mindful of the possibility that unwelcome inflationary imbalances could yet emerge. We need to keep both possibilities in mind."

In his prepared remarks Evans did not make any specific comments about the U.S. economic outlook or the appropriateness of current U.S. interest rates, though on Tuesday he said he believes policy is "probably" in the right place for now.

"At a minimum, unemployment is not so far below its natural rate that overly high inflation is an urgent threat," Evans said, noting that inflation has been undershooting the Fed's 2% target.