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Fed's Kaplan says inflation forces remain muted, economy running out of workers

Key Points
  • "It's not that we don't have any inflation...Inflation forces I think are going to be muted including technology," Kaplan says.
  • His comments came after Federal Reserve Chairman Jerome Powell said Wednesday low inflation pressures are just "transitory," hitting that a rate cut won't be on the horizon. 
  • Kaplan also said the U.S. is "running out of the capacity in the workforce."
VIDEO7:4707:47
Dallas Fed President Robert Kaplan: Strong jobs number consistent with solid growth

Robert Kaplan, president of the Federal Reserve's Dallas district, said low inflation is here to stay.

"It's not that we don't have any inflation...Inflation forces I think are going to be muted including technology," Kaplan said Friday in an interview with CNBC's Steve Liesman.

"Technology enables disruption and to some extent globalization. Businesses have less pricing power today and this comes through in corporate earnings report and it comes through in all my conversations," Kaplan added.

His comments came after Federal Reserve Chairman Jerome Powell said Wednesday low inflation pressures are just "transitory," hitting that a rate cut won't be on the horizon.

Kaplan also said the U.S. economy is running out of workers after data come out Friday showing the U.S. added a robust 263,000 new hires in April while the unemployment rate fell to 3.6%, the lowest since December 1969.

"I think it's still my view that we are running out of the capacity in the workforce," Kaplan said. "We are bringing people in off the sidelines. But we are starting to approach prime rates of participation pre-crisis and we are reaching pre-recession lows on discouraged workers in a good way. I would expect it's going to slow down but I don't think it's going to be a bad sign."