Ten Years at the Fed
JUNE 2, 1987
Paul A. Volcker resigns as chairman of the Federal Reserve, and Reagan nominates Alan Greenspan for the post. Wall Street praises Greenspan as an inflation fighter.
AUG. 11, 1987
Greenspan is sworn in as Fed chairman.
SEPT. 4, 1987
To establish his credentials as an inflation fighter, Greenspan pushes the discount rate up by half a percentage point.
OCT. 19, 1987
The stock market drops 508 points. Greenspan reacts by opening the monetary spigot to flood the markets with liquidity. He also ensures that brokerage firms are getting the credit they need.
AUG. 8, 1988
Rising inflation and tight labor markets lead the Fed to raise the discount rate a half-point, to 6.5%, on the eve of the GOP convention--a move that infuriates soon-to-be President George Bush.
AUG. 2, 1990
Iraqi troops invade Kuwait, interfering with Greenspan's attempt to engineer a soft landing for the economy.
JULY 10, 1991
Despite bitter feelings between the Federal Reserve and the White House, Bush nominates Greenspan for a second term to avoid roiling the markets.
DEC. 19, 1991
With the economy in the doldrums, the Fed votes to slash the discount rate a full percentage point, to 3.5%. Fed officials hope the bold move will jump-start growth.
FEB. 4, 1994
After keeping the Fed funds rate steady for a record 18 months, Greenspan leads the Fed in a ''preemptive strike'' against inflation by raising the rate one-quarter point. The Fed also makes history by publicly announcing a rate move for the first time.
JAN. 31, 1995
Greenspan lends his support as the White House cobbles together a $50 billion international rescue of the Mexican peso.
FEB. 1, 1995
The Fed raises the funds rate a half-point, to 6%--the last of seven tightening moves begun the year before. This move is meant to send a signal to Wall Street that the Fed is reaffirming its fight against inflation.
JULY 6, 1995
Amid fears of a coming recession, the Fed cuts rates a quarter-point. Two more quarter-point cuts follow, in December and January.
FEB. 22, 1996
With the Senate in GOP hands, Clinton has little choice but to nominate Greenspan for a rare third term. The chairman is confirmed and sworn in on June 20.
JUNE 24, 1996
Clinton Budget Director Alice Rivlin takes office as Fed vice-chair, replacing Alan Blinder. Rivlin plays a key role in supporting Greenspan's efforts to fend off calls for higher rates to slow a surging economy.
SEPT. 24, 1996
For the second time since July, Greenspan fends off a call by Fed hawks, who want to raise rates as much as a half-point. He argues that there's little threat of inflation exploding.
DEC. 5, 1996
In a Washington speech, Greenspan wonders aloud whether the stock market is suffering from ''irrational exuberance.'' After a short-term drop, the market recovers and zooms ahead to new records in the spring.
MAR. 25, 1997
Greenspan nudges the Fed funds rate up a quarter-point, to 5.5%. He calls the move an ''insurance'' policy--in case inflation should unexpectedly break out.
JULY 2, 1997
The FOMC opts, for a second straight meeting, to hold rates steady even though unemployment had reached its lowest level in 25 years.
DATA: BUSINESS WEEK
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