Former Federal Reserve Chairman Alan Greenspan told CNBC on Thursday the United States currently has the tightest labor market he's ever seen.
"That means if rates go up, ultimately prices take hold," Greenspan said in an interview with "Squawk Box." "But concurrently, we have a very slow productivity increase."
Economist say the labor market is in excellent shape heading into the end of 2018, with the unemployment rate dropping to a point not seen in nearly 50 years.
President Donald Trump has repeatedly slammed current Fed Chairman Jerome Powell in recent weeks, saying the Fed is increasing rates too quickly and that stronger economic growth won't lead to problematic inflation.
According to minutes released of the Fed's most recent policy meeting, central bank officials remain convinced that continuing to gradually increase interest rates is the best formula to preserve a steady economy.
Greenspan served as chairman of the Fed of the United States from 1987 to 2006, spanning four presidents.
—CNBC's Jeff Cox contributed to this report.
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