NEW YORK (TheStreet) -- The U.S. is at risk of entering a period of stagflation, former Federal Reserve Chairman Alan Greenspan said on CNBC's "Squawk Box" on Thursday morning. Stagflation is a combination of high inflation, along with slow economic growth and high unemployment. 

"When money supply accelerates, inflation picks up after a while. My concern now is actually stagflation. I think we're in a period because of fiscal reasons [that have led to] a sluggish economic growth rate," he said. 

On top of this are "very early signs of a pickup of inflation" that will boost profit margins for a period, Greenspan added. "But it's a false dawn," and we will eventually enter into a state of stagflation. 

"That's my view. And I think it's very well within reason," Greenspan claimed. 

The former Fed Chair served under four presidents during his term and said "the whole political structure that's been in a state of chaos for the last several years has not been good." The solution to the problems require some "very important and very tough political judgments." 

A number of investors think the Fed has been dragging its feet when it comes to raising rates, although many think the agency will do so at its December meeting. 

"Has it taken too long to raise rates?" CNBC's Joe Kernen asked. 

"I don't want to comment on current monetary policy, but I'd love to see Dodd-Frank disappear. I think it was a disastrous mistake," Greenspan said in response. President-elect Donald Trump has said that he would like to repeal Dodd-Frank because it makes it hard for bankers to loan money to businesses. 

The Dodd-Frank Wall Street Reform and Consumer Protection Act places regulation of the financial industry in the hands of the government. It was passed by the Obama administration in 2010 as a way to prevent a future financial crisis similar to the one that happened in 2008. 

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