Alan Greenspan, RIP

Alan Greenspan’s legacy is a reminder that disciplined monetary policy can shape markets and the broader economy for years. His strongest achievement was helping lock in low inflation, which supported longer-term growth and gave investors a more stable backdrop for capital allocation.

For advisors and investors, the key lesson is that price stability matters as much as employment when judging policy success. Periods of easy money can lift assets in the short run, but they also raise the risk of future tightening, slower growth, and market stress.

Greenspan was also right to recognize that productivity gains can allow faster expansion without immediate inflation pressure. Even so, his later mistakes around rates and housing show how quickly excess liquidity can build imbalances.

The broader investment takeaway is to stay focused on fundamentals rather than assuming central banks can smooth every cycle. In today’s environment, that means balancing opportunity with caution as policy shifts continue to influence valuations and risk appetite.