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#USStocks1990: Greenspan’s Era Arrives ## Let’s first talk about the new bosses in 2026 On May 15, Kevin Warsh, the new chairman of the Federal Reserve, took of

2026-07-23·x-repost-20260723-164504

#USStocks1990: Greenspan’s Era Arrives ## Let’s first talk about the new bosses in 2026 On May 15, Kevin Warsh, the new chairman of the Federal Reserve, took office. In nominating Kevin Warsh, Trump hopes that he can push for interest rate cuts to provide a loose economic environment for Trump's term and future elections.

Therefore, before taking office, Kevin Warsh repeatedly hinted that the U.S. government would implement a policy combination called "interest rate reduction + balance sheet reduction." However, everyone has also seen that since Kevin Warsh took office in the middle of the month, the market has begun to be turbulent.

Can the market still expect an "interest rate cut"? No, now the market is beginning to worry about whether to raise interest rates once or twice this year. Therefore, in Kevin Washty's "rate cut + balance sheet reduction", "rate cut" is just a placebo to relieve the White House, while "balance sheet reduction" is the real policy demand in it.

He is a hawk at heart. On May 19, when the market began to smell of raising interest rates, Trump was asked in an interview whether Warsh would still cut interest rates when financial markets generally believed that the Federal Reserve was more likely to raise interest rates.

He replied: "I will let him do what he wants." "He is a very talented person, he will be fine, and he will do a good job." This implies that Trump will most likely be unable to force Kevin Warsh, who has already taken office, to implement a real policy of raising interest rates and shrinking the balance sheet.

I dare say that Kevin Warsh has seen the crisis of the US dollar and may be the savior of the US dollar in the 1980s - Paul Volcker II; Another attempt to save the dollar, but whether he can succeed is another question. Worry about the U.S. stock market and AI bubble. ## Who is Greenspan?

Back in 1987, Paul Volcker, the hawk who saved the dollar, officially resigned on August 11 of that year. The new Federal Reserve Chairman, Alan Greenspan, took office.

We have said that the chairman of the Federal Reserve is generally a member of the Federal Reserve Board of Governors and generally has considerable experience in the internal supervision of the Federal Reserve. But not Greenspan.

In his early days, Greenspan was engaged in economic research at the National Industrial Conference Board (now the Conference Board). Later, he went abroad to establish an economic consulting company, serving many large enterprises.

Because of his precise analysis of economic data and unique insights into economic cycles, he established a very high reputation on Wall Street and the business community, and was known as the "economist's economist." In 1974, Greenspan entered the system for the first time and served as chairman of the White House Council of Economic Advisers (CEA) at the invitation of President Nixon, and remained in office until 1977 under President Ford.

And when President Reagan nominated him to be chairman of the Federal Reserve in 1987, he actually returned to business. He is an outsider , but he also had sufficient practical macroeconomic consulting experience and core economic decision-making experience.

He was a practical economist with multiple identities in academia, business circles, and government, and was familiar to the private sector, Wall Street, and the government at that time. This background determines his approach in this position in the future, almost changing the status of the Fed chairman among the private sector and the market.

He is seen as the messenger between God (the economy) and the people (the market). People look forward to hearing his voice. It doesn’t matter what the president said. What Greenspan said needs to be analyzed frame by frame.

## He was also a hawk when he first took over In August 1987, when Paul Volcker was about to leave office, the Federal Reserve entered an interest rate increase cycle in response to economic overheating, rising oil prices, and the "Louvre Accord" to prevent the dollar from excessive depreciation, with the federal interest rate raised to about 7.3%.

After Greenspan took over, he continued to raise interest rates following Paul Volcker's pace. Something interesting is coming! Less than two months after taking over, the U.S. stock market crashed in October, with the Dow Jones Industrial Average plummeting an unprecedented 22.6% that day. There was no other way.

Greenspan could only interrupt the originally planned interest rate hike cycle and start cutting interest rates until the following spring, when it dropped to about 6.7%, which was considered a "gentle interest rate cut." By March 1988, seeing the Dow stabilize, Greenspan returned to his previous interest rate hike cycle, raising interest rates to around 9.8%.

The Federal Reserve still maintained high interest rates into the mid-to-late 1980s. On the one hand, they believe that the U.S. economy is very strong and may have reached a stage of stagflation. Oil prices are at a low level for a long time, and there is room for greater rebound.

To prevent inflation, a high risk-free interest rate of 5%-10% must be maintained; On the other hand, they believe that the U.S. economy is very strong and can withstand such high interest rates. At this time, I think Greenspan is basically following Paul Volcker's ideas and rhythm. At least he is a complete hawk in behavior.

## After all, he is not the guardian of the dollar. But it was true that in the late 1980s, when the economy was growing, the accumulated bubble was about to burst, and Greenspan's hawkish behavior could not last long.

Starting from 1989 to 1992, as we mentioned, the real estate bubble burst, the junk bond bubble burst, savings and loan financial institutions were in crisis, the economy began to slow down, and the Gulf War began, forcing Greenspan to cut interest rates 23 times in a row in the past three years, all the way down to around 3%.

This drop will be difficult to add back, which ushered in the thirty-year era of low interest rates in the United States from the 1990s to the 2020s. Paul Volcker guarded the U.S. dollar for ten years, but lost his fortune three years after handing it over to Greenspan. After all, Greenspan was not the guardian of the U.S. dollar.

Then the question of the future comes: Is the new Kevin Wash the guardian of the dollar?

Full text

#USStocks1990: Greenspan’s Era Arrives ## Let’s first talk about the new bosses in 2026 On May 15, Kevin Warsh, the new chairman of the Federal Reserve, took of

#USStocks1990: Greenspan’s Era Arrives ## Let’s first talk about the new bosses in 2026 On May 15, Kevin Warsh, the new chairman of the Federal Reserve, took office. In nominating Kevin Warsh, Trump hopes that he can push for interest rate cuts to provide a loose economic environment for Trump's term and future elections. Therefore, before taking office, Kevin Warsh repeatedly hinted that the U.S. government would implement a policy combination called "interest rate reduction + balance sheet reduction." However, everyone has also seen that since Kevin Warsh took office in the middle of the month, the market has begun to be turbulent. Can the market still expect an "interest rate cut"? No, now the market is beginning to worry about whether to raise interest rates once or twice this year. Therefore, in Kevin Washty's "rate cut + balance sheet reduction", "rate cut" is just a placebo to relieve the White House, while "balance sheet reduction" is the real policy demand in it. He is a hawk at heart. On May 19, when the market began to smell of raising interest rates, Trump was asked in an interview whether Warsh would still cut interest rates when financial markets generally believed that the Federal Reserve was more likely to raise interest rates. He replied: "I will let him do what he wants." "He is a very talented person, he will be fine, and he will do a good job." This implies that Trump will most likely be unable to force Kevin Warsh, who has already taken office, to implement a real policy of raising interest rates and shrinking the balance sheet. I dare say that Kevin Warsh has seen the crisis of the US dollar and may be the savior of the US dollar in the 1980s - Paul Volcker II; Another attempt to save the dollar, but whether he can succeed is another question. Worry about the U.S. stock market and AI bubble. ## Who is Greenspan? Back in 1987, Paul Volcker, the hawk who saved the dollar, officially resigned on August 11 of that year. The new Federal Reserve Chairman, Alan Greenspan, took office. We have said that the chairman of the Federal Reserve is generally a member of the Federal Reserve Board of Governors and generally has considerable experience in the internal supervision of the Federal Reserve. But not Greenspan. In his early days, Greenspan was engaged in economic research at the National Industrial Conference Board (now the Conference Board). Later, he went abroad to establish an economic consulting company, serving many large enterprises. Because of his precise analysis of economic data and unique insights into economic cycles, he established a very high reputation on Wall Street and the business community, and was known as the "economist's economist." In 1974, Greenspan entered the system for the first time and served as chairman of the White House Council of Economic Advisers (CEA) at the invitation of President Nixon, and remained in office until 1977 under President Ford. And when President Reagan nominated him to be chairman of the Federal Reserve in 1987, he actually returned to business. He is an outsider , but he also had sufficient practical macroeconomic consulting experience and core economic decision-making experience. He was a practical economist with multiple identities in academia, business circles, and government, and was familiar to the private sector, Wall Street, and the government at that time. This background determines his approach in this position in the future, almost changing the status of the Fed chairman among the private sector and the market. He is seen as the messenger between God (the economy) and the people (the market). People look forward to hearing his voice. It doesn’t matter what the president said. What Greenspan said needs to be analyzed frame by frame. ## He was also a hawk when he first took over In August 1987, when Paul Volcker was about to leave office, the Federal Reserve entered an interest rate increase cycle in response to economic overheating, rising oil prices, and the "Louvre Accord" to prevent the dollar from excessive depreciation, with the federal interest rate raised to about 7.3%. After Greenspan took over, he continued to raise interest rates following Paul Volcker's pace. Something interesting is coming! Less than two months after taking over, the U.S. stock market crashed in October, with the Dow Jones Industrial Average plummeting an unprecedented 22.6% that day. There was no other way. Greenspan could only interrupt the originally planned interest rate hike cycle and start cutting interest rates until the following spring, when it dropped to about 6.7%, which was considered a "gentle interest rate cut." By March 1988, seeing the Dow stabilize, Greenspan returned to his previous interest rate hike cycle, raising interest rates to around 9.8%. The Federal Reserve still maintained high interest rates into the mid-to-late 1980s. On the one hand, they believe that the U.S. economy is very strong and may have reached a stage of stagflation. Oil prices are at a low level for a long time, and there is room for greater rebound. To prevent inflation, a high risk-free interest rate of 5%-10% must be maintained; On the other hand, they believe that the U.S. economy is very strong and can withstand such high interest rates. At this time, I think Greenspan is basically following Paul Volcker's ideas and rhythm. At least he is a complete hawk in behavior. ## After all, he is not the guardian of the dollar. But it was true that in the late 1980s, when the economy was growing, the accumulated bubble was about to burst, and Greenspan's hawkish behavior could not last long. Starting from 1989 to 1992, as we mentioned, the real estate bubble burst, the junk bond bubble burst, savings and loan financial institutions were in crisis, the economy began to slow down, and the Gulf War began, forcing Greenspan to cut interest rates 23 times in a row in the past three years, all the way down to around 3%. This drop will be difficult to add back, which ushered in the thirty-year era of low interest rates in the United States from the 1990s to the 2020s. Paul Volcker guarded the U.S. dollar for ten years, but lost his fortune three years after handing it over to Greenspan. After all, Greenspan was not the guardian of the U.S. dollar. Then the question of the future comes: Is the new Kevin Wash the guardian of the dollar?

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