That timing is relevant again as investors debate whether the AI-led Nasdaq rally has gone too far, too fast.<\/p>\n
Greenspan, who chaired the Fed from 1987 to 2006 and died Monday at the age of 100<\/a>, cemented his place in market history with a phrase that became inseparable from the dot-com boom. But the actual warning was more cautious than the shorthand suggests.<\/p>\n Greenspan framed it as a question: “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?”<\/p>\n The Fed chief was not declaring that stocks had peaked. He was asking how central bankers should think about asset prices before the fallout reached the real economy.<\/p>\n Both lines in the chart begin when the Nasdaq reclaimed record highs after prolonged downturns: March 14, 1995, for the dot-com era and Feb. 29, 2024, for the AI era. The modern line runs through Monday, June 22. The dot-com line keeps going to its peak on March 10, 2000.<\/p>\n At the point that corresponds to today, the AI-era Nasdaq is up about 65% from its breakout. The dot-com Nasdaq was up about 79% at the same point.<\/p>\n Then came the part investors remember: From that historical point, the Nasdaq rallied another 249% before peaking in March 2000.<\/p>\n Greenspan’s famous phrase was less a sell signal than a question about when excess becomes dangerous.<\/p>\n For the dot-com Nasdaq, the answer was still more than three years away.<\/p>\n Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared<\/a> or email him at jaredblikre@yahooinc.com.<\/p>\n![\"What](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/06\/greenspan_1066.png\")
What happened after Greenspan warned of “irrational exuberance” in 1996. Both lines start when the Nasdaq reclaimed record highs: March 14, 1995, and Feb. 29, 2024. The dot-com line continues to its March 2000 peak. \u00b7 Yahoo Finance analysis of AlphaSpace data <\/p>\n