Alan Greenspan Expanded Fed Power Over 5 Terms, Reshaping Policy After 1987

3 articles · Updated · Fox News · Jun 22

Five four-year terms after taking over in 1987, Alan Greenspan left a far more powerful Federal Reserve, tightening the chair’s control, expanding staff to more than 3,000 and deepening its global regulatory role.
Greenspan also shifted monetary policy away from Volcker-era M2 targeting toward data-driven Fed funds rate decisions, a framework markets largely trusted through the 1990s before formal inflation targeting arrived in 2014.
A 23% Dow plunge on Black Monday in 1987 helped define his crisis playbook: rapid liquidity support that later evolved into proactive rate cuts during the 1998 and 2000 market shocks.
That approach fed the idea of a 'Greenspan put' even as his 1996 'irrational exuberance' warning failed to stop the boom that ended in the 2000 dot-com crash.
Since his 2006 retirement, the Fed has accumulated still broader powers—from paying interest on reserves to bond buying and repo backstops—leaving today’s central bank more entwined with regulation and fiscal markets.