Ex-Fed Chair Alan Greenspan Warns of Stock Market Decline, Tells Investors to 'Run for Cover'

Former Federal Reserve chairman Alan Greenspan warned of a market decline while speaking Tuesday on CNN as the Fed's monetary policymaking body prepared to meet.

"It would be very surprising to see it sort of stabilize here, and then take off," Greenspan said while discussing equity prices with CNN's Julia Chatterley. He said that markets could continue rising but "at the end of that run, run for cover."

Greenspan, who many economists blame for the 2008 financial crisis, also warned that the country could be hit by stagflation.

The S&P 500, the Dow and the Nasdaq are all down on the year. The S&P 500 closed Monday trading at its lowest point in more than a year.

The market declines are driven by a "litany of things," chief investment strategist at Brown Brothers Harriman told Politico. "I'd throw renewed fears of a government shutdown in there. But it's really a list of things that we are going to have to deal with throughout 2019. There is a lot of headline risk that can prompt day-to-day volatility even if underlying conditions remain fairly strong."

Wall Street traders expected the Fed would raise interest rates to between 2.25 and 2.50 at its two-day policy meeting, which ends Wednesday. That level would be the highest in a decade but low compared to the historical rate, The Washington Post reported.

President Donald Trump has tweeted about the Fed meeting and urged the central banking system to not raise interest rates. On Monday, he wrote, "It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!"

Trump, who touted his ability to improve the economy on the 2016 campaign trail, has criticized the Fed chairman he appointed, Jerome Powell. The president has alleged the Fed leader is trying to undercut him.

Other economists have advocated for keeping interest rates at their current 2 to 2.25 percent but warned about the danger of creating the sense that the Fed had ceded to Trump's demands. "I'm in the peculiar position of thinking the Fed should not raise rates, but it should not listen to the President, which is a hard position," New York Times columnist Paul Krugman said. "There's a pretty good case for not raising rates now. But to not raise rates...would look like they're allowing themselves to be bullied."