Former Federal Reserve Chair Alan Greenspan warns that America is entering a “very tough” period of stagflation as it emerges from economic stagnation.

“As the inflationary pressures which now seem to be building, we’ve just been through a long period of stagnation, we’re moving now toward what we used to call stagflation,” he told Fox Business Network. Stagflation is commonly defined as persistent high inflation combined with high unemployment and stagnant demand in a country’s economy.

Greenspan explained that the economic transition only appears positive in the short term.

“The short term outlook begins to look sort of slightly buoyant, because the inflation actually moves profitability, and you get a sense that maybe things are over. But that’s going to be a false dawn.”

Greenspan compared today’s economy to the 1970s.

“We’ve been through this period before of stagflation, back in the 1970s, and it’s going to be very tough to get