Greenspan affirms Fed liquidity after Black Monday, launching the "Fed put" doctrine

On October 20, 1987, one day after the Dow Jones Industrial Average fell 22.6% in a single session — the largest one-day crash in history — Federal Reserve Chair Alan Greenspan issued a one-sentence statement affirming the Fed's readiness to provide liquidity to the financial system. The Fed then cut rates and pressured banks to lend to securities firms, halting a credit freeze. Markets recovered their Black Monday losses within two trading sessions, establishing the precedent that the Fed would intervene to cushion financial markets from severe downturns.