Greenspan Is Gone, But the Fed Put Endures

Macro
โดย Yahoo Finance·Read original
Summary · why it matters

Former Federal Reserve Chairman Alan Greenspan, who led the U.S. central bank from 1987 to 2006, passed away on Monday at the age of 100. One of his most lasting impacts on financial markets is the widespread belief that when markets face severe stress, the Federal Reserve will intervene to stabilize conditions, a concept commonly referred to as the Fed Put. The idea gained prominence during the 1998 collapse of Long-Term Capital Management, when Greenspan helped coordinate a private-sector rescue and the Fed cut interest rates by 75 basis points over six weeks, reinforcing the notion that the central bank serves as the market's buyer of last resort. Since then, the same principle has shaped market expectations during major crises, including the dot-com bubble, the 2008 Global Financial Crisis, and the 2020 pandemic turmoil, with the Fed responding with significant intervention measures each time.

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