Alan Greenspan dies at the age of 100

Greenspan served for more than 18 years as chief of the world's most influential central bank, leading the Fed from the late 1980s to the mid-2000s. He had led the world's most influential central bank from the late 1980s to the mid-2000s, leaving his stamp on the Fed. During this time, he shaped US monetary policy across a total of four presidents: Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush. His successor in February 2006 was Ben Bernanke.

Greenspan's assumption of office in August 1987 came at a time of economic upheaval. Just two months after his appointment by President Reagan came Black Monday: On October 19, 1987, the Dow Jones plunged by more than 22 percent – the largest single-day loss in the index's history at that time. Greenspan later described the experience in these words: „Der Crash war weit größer, als wir auch nur im Entferntesten erwartet hatten." He added: „Uns wurde der Boden unter den Füßen weggezogen." With rapid liquidity injections, he calmed the markets; just twelve months later, the economy had recovered, and the feared recession failed to materialize.

First Crucible: Black Monday 1987

In the years that followed, Greenspan had to master numerous further crises. He steered the central bank through the recession of the early 1990s, responded to the Asian and Russian crises of the late 1990s with significant rate cuts, and lowered the US federal funds rate to the then record low of one percent after the bursting of the dot-com bubble. Following the terrorist attacks of September 11, 2001, he cut rates further to support the economy and equity markets. He also intervened with low rates during the collapse of the LTCM hedge fund.

Under Greenspan's leadership, the US economy experienced an uninterrupted expansion of roughly ten years between March 1991 and March 2001 – the second-longest economic expansion in the history of the United States. During this period, he kept inflation low and earned a reputation as an „Orakel" and „Maestro" of monetary policy. One episode illustrated his cautious style: in 1990, he told the Senate Banking Committee that the central bank would „entschlossen handeln" to avert a recession. Later, in the mid-1990s, he refrained from raising rates despite pressure to do so, because he trusted in a productivity surge. Then-Fed Chair Jerome Powell later pointed to this judgment as an example of how human insight can surpass technical models. A remark by Greenspan in late 1996 about „irrationale Überschwänglichkeit" in the equity markets triggered selling worldwide.

The Oracle of Low Interest Rates

His reputation as a „legendärer Notenbankchef" and his often cryptic communication style – he avoided concrete commitments – shaped his tenure. The New York Times described him as a master of political power plays, noting that his face behind thick-rimmed glasses was, at the height of his fame, as recognizable as that of a movie star. Andrea Mitchell, NBC News' chief Washington correspondent and Greenspan's wife, paid tribute to him: „Er war eine herausragende Persönlichkeit, die jahrzehntelang unter Präsidenten beider Parteien die US-Wirtschaft mitgeprägt hat" and „stets ehrlich genug ... seine Fehler einzugestehen".

With the end of his tenure in January 2006, however, the perception of Greenspan changed fundamentally. Just two years after his departure, the US real estate bubble burst, triggering a global financial crisis. The US banking sector stood on the brink of collapse, the economy slid into the worst recession since the 1930s, the investment bank Lehman Brothers went bankrupt, and numerous other banks – including UBS – survived only thanks to government bailouts. Critics held Greenspan's low interest rate policy and his faith in weakly regulated financial markets partly responsible. Before Congress in 2008, he acknowledged a „Fehler" in his mental model and admitted that he had been wrong to assume that banks could essentially regulate themselves. The US magazine Newsweek commented that Greenspan's death was a „letzte Lektion für Trump": not to rely solely on deregulated markets and low interest rates.

Criticism After the 2007/2008 Financial Crisis

Greenspan's life outside the central bank was unusual. Born in 1926 to Hungarian immigrants in New York, he grew up three years before the stock market crash of 1929. He showed an early talent for mathematics and music, attended the Juilliard School of Music, and played clarinet and saxophone. In his youth, he performed with musicians such as Henry Jerome and jazz musician Stan Getz. Alongside his economics studies at New York University, he abandoned his doctoral work at Columbia University in 1953 to found a financial consulting firm. He gained political experience as an advisor in Richard Nixon's 1968 presidential campaign and later worked for Republican presidents Nixon and Gerald Ford before Reagan appointed him Fed chair in 1987. Andrea Mitchell recalled his lifelong „irrationale Überschwänglichkeit" for baseball, tennis, golf, and jazz.

Even after leaving the central bank, Greenspan remained a public voice. As recently as January 2026, he defended the Fed's independence against the influence of President Donald Trump, who has been exerting massive pressure on the central bank to cut rates. Together with other former Fed chairs and economists, Greenspan publicly supported then-Fed Chair Jerome Powell, whom Trump had attacked in unprecedented fashion and against whom he had even initiated fraud investigations. Greenspan described Trump's tariff policy as an „Angriff auf die Wirtschaft" and expressed, even before the COVID-19 pandemic, the expectation that negative interest rates would eventually reach the United States as well. Trump's designated successor to Powell is Kevin Warsh, who has taken over the position. Most recently, the US inflation rate stood at 4.2 percent – above the Fed's two-percent target. Greenspan is survived by his wife, Andrea Mitchell, who as an NBC reporter had accompanied him for decades.

Later Years: Warnings About Political Pressure

The Federal Reserve paid final tribute to Greenspan with the words that, under his leadership, the central bank had „eine anhaltende Phase der Preisstabilität erreicht, die das Wirtschaftswachstum unterstützte und dazu beitrug, das Vertrauen der Öffentlichkeit in die Institution zu festigen". Greenspan, whose loose monetary policy after the recession of the early 1990s had ignited a long-lasting boom, was regarded for years as an oracle and a maestro – a man whose imprint on modern monetary policy and on the public image of the US central bank will remain visible for a long time to come.