Alan Greenspan, former head of Federal Reserve, dies at 100

CNN

By Chris Isidore, CNN

(CNN) — Former Federal Reserve Chairman Alan Greenspan, once hailed as a maestro for directing a booming economy but who later received some of the blame for the housing bust and financial meltdown that occurred after he left office, has died, according to his wife, Andrea Mitchell. He was 100.

Greenspan served five terms as Fed chairman under four presidents, starting with Ronald Reagan, who nominated him in 1987. His term under George W. Bush expired in 2006. His eighteen-and-a-half year tenure is the second longest as head of the nation’s central bank.

His death was announced in a statement by Mitchell, a correspondent for NBC News and his wife for 29 years.

“Alan passed away at our home this morning at the age of 100 from complications of Parkinson’s Disease,” Mitchell said in her statement.

“He was a giant of a man who helped shape the U.S. economy for decades under presidents of both parties, but was always honest in acknowledging his mistakes,” she said.

Born in New York City, Greenspan taught economics in the 1950s at New York University, his alma mater, while he was chairman and president of economic consulting firm Townsend-Greenspan & Co. that he helped run for 21 years. He served as the director of domestic policy research with Richard Nixon’s 1968 presidential campaign and was a part-time adviser to him after he took office.

In 1974, the final year of the Nixon administration, Greenspan became chairman of the President’s Council of Economic Advisers and stayed throughout the tenure of President Gerald Ford. He returned to his economic consulting work after Ford’s 1976 defeat and continued until his appointment to the Fed.

“It’s a sad day for the Fed,” Fed Governor Christopher Waller said Monday at an event at the US central bank. The Fed also released a statement reflecting on the former chairman’s legacy.

“Chairman Greenspan’s legacy endures at the Federal Reserve — in those he mentored directly, in the economists and public servants he inspired, and in the frameworks and practices he helped shape,” the statement said.

Saw Fed through Black Monday, economic boom

Two months into Greenspan’s tenure, the stock market suffered its largest one-day percentage decline, when the Dow plunged 22% on October 19, 1987, a day that became known as “Black Monday.” The next day, Greenspan announced that the Fed was ready “to serve as a source of liquidity to support the economic and financial systems.” His assurance helped the market begin to make a relatively quick recovery.

During his time at the Fed, the US economy experienced one of the strongest peacetime economic expansions in its history. Unemployment fell below 4%, the stock market reached what were then record highs, and the federal government began running budget surpluses rather than deficits.

After the bursting of the dot-com bubble in 2000, the economy slipped into a recession in 2001 and was further shaken by the September 11 terrorist attacks. That prompted Greenspan and the Fed to cut its key interest rate to levels previously unheard of then, eventually reaching 1%.

Low rates later blamed for housing bubble

Many economists say that those low rates helped inflate the housing bubble, encouraging investors to give mortgages to borrowers who would not previously have qualified for home loans. People also criticized the Fed for not exercising better oversight of the mortgage market during those go-go years.

Greenspan dismissed talk of a housing bubble while he was in office, saying that while individual local markets might be overpriced, there was no evidence of a nationwide bubble.

But when home values collapsed nationwide and foreclosures and bank failures soared in the fall of 2008, he testified before the House Oversight Committee that he was in a “state of shocked disbelief.”

He said that while he had tried to warn about the riskiness of some of the home loans, the economic damage wrought by the bursting of the bubble had “turned out to be much broader than anything I could have imagined.”

He later testified that the low interest rates he and the Fed set did not cause the housing bubble or the ensuing crisis and he believed he had been right 70% of the time when he was in office.

During his time at the Fed, Greenspan’s public comments became famous for their dense, difficult-to-understand prose, forcing investors to struggle to decipher what he meant. That was no accident.

“I spend a substantial amount of my time endeavoring to fend off questions, and worry terribly that I might end up being too clear,” he told the New York Times in 1995.

At the same time, he also made the Fed’s actions more transparent. The central bank had never issued policy statements at the end of its rate-setting meetings until Greenspan instituted the practice in 1994.

Known for ‘irrational exuberance’ comment

One of his most famous comments came in 1996, when he warned that investors were driving up the price of stocks because of “irrational exuberance.” The comment briefly rattled world markets, although the rise in tech stocks continued for another four years.

Mitchell’s statement Monday made reference to that famous statement.

“To me he was my husband, who shaped my life from our very first date in 1984. He had ‘irrational exuberance’ for baseball, the Washington Commanders, tennis, golf and music, especially jazz,” Mitchell added. “He will be remembered for his brilliance and his kindness. Being his life partner was the joy of my life.”

Greenspan didn’t just love listening to jazz. As a teenager, he “pushed his academic interests aside” and put off college for a year to play in a jazz swing band, he told CNN in 2017.

“I was the band intellectual who did their income taxes,” he said.

After a year, Greenspan told CNN he realized he belonged in the library, not in a nightclub. He enrolled at New York University, where he earned bachelor’s and master’s degrees in economics. Eventually, he would also receive a doctorate.

During the economic boom of the late 1990s and early 2000, Greenspan was widely praised for the nation’s economic success. Bob Woodward’s 2000 book on him was titled “Maestro: Greenspan’s Fed and the American Boom.”

Greenspan deserves a great deal of credit for being among the first to see the impact that the internet and personal computer would have on the economy in the 1990s, Kevin Hassett, director of the National Economic Council told CNBC Monday morning. That insight helped convince the Fed to allow the economy to run hotter than it otherwise might have.

“He was just an absolutely brilliant mind who saw the computer revolution happening before anyone else did,” said Hassett, who was a young economist working for the Fed in the 1990s. “And if you go back and look at the history of the American economy going back over the last 50 years, I think Greenspan’s judgment to leave the economy alone, and let the internet boom happen, and the productivity boom from internet happen….that judgment created an enormous amount of wealth and prosperity for our country.”

New Fed Chairman Kevin Warsh has argued that Fed policymakers should take the same leap of faith with AI as they did with the internet under Greenspan, and consider cutting interest rates. He said the technology could prove to be “structurally disinflationary” like the internet.

Queen Elizabeth II bestowed upon Greenspan the honorary title Knight of the British Empire in 2002, citing him for his “wisdom and skill” and “for his outstanding contribution to global economic stability.” Shortly before he left office in 2005, Greenspan was awarded the Presidential Medal of Freedom by President Bush.

After leaving the Fed, Greenspan ran a Washington economic consulting firm, Greenspan Associates LLC, serving as an adviser to major financial firms. He also gave speeches and wrote a memoir, “The Age of Turbulence: Adventures in a New World,” which was published in the fall of 2007, just before the beginning of the recession that tarnished his reputation.

His most recent book, published in 2018, was “Capitalism in America: A History.”

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

CNN’s Bryan Mena contributed reporting.