WASHINGTON — Alan Greenspan, widely viewed as the U.S. economy's maestro, is preparing to turn over his conductor's baton to successor, Ben Bernanke.

Greenspan, 79 and the second-longest serving chairman of the Federal Reserve, will preside over his last interest-rate meeting Tuesday as he retires after 18½ years as head of the central bank.

Waiting in the wings to take the baton is Bernanke, 52, chosen by President Bush to run the Fed.

Bernanke is a respected economist who spent 17 years teaching at Princeton University before becoming a governor at the Federal Reserve and then chairman of the White House's Council of Economic Advisers.

The Senate is expected to approve Bernanke's nomination Tuesday. His swearing in as the 14th chairman of the Federal Reserve, created by Congress in 1913, probably will come Wednesday.

Greenspan's last major piece of business Tuesday will be guiding his colleagues to a decision on interest rates. Economists predict the Fed will boost interest rates by one-quarter percentage point to 4.50 percent to thwart inflation.

If the ritual of past meetings holds, Greenspan will sink into his chairman's chair — the top of which has a little brass plaque that carries his name. He and his colleagues will discuss interest rate policy gathered around a 27-foot-long mahogany table that sits beneath a 1,000-pound, brass-and-glass chandelier festooned with dignified eagles.

Greenspan's agile handling of the economy has earned him monikers, including the maestro, the greatest central banker who ever lived and the second-most important person in Washington.

On Greenspan's watch, the economy — from March 1991 to March 2001 — posted its longest continuous expansion in history. The two recessions during his tenure were mild.

He confronted crises including a stock market crash in 1987 — just two months into his job; financial upheavals in some parts of the world in the late 1990s; the bursting of the stock market bubble in 2000 that wiped out trillions of dollars in investor wealth; and the Sept. 11, 2001, terror attacks.

In addition, Greenspan was a dominant "alpha dog" who maintained the Fed's political independence in making interest-rate decisions and defended its regulatory turf, said Kevin Hassett, a former Fed economist who directs economic policy studies at the American Enterprise Institute.

Bernanke will want to show early on that he's the new alpha dog on the block, Hassett said. The message he needs to convey is akin to saying: "Here I am. I'm the new alpha. Don't-mess-with-me kind of speech," Hassett said.

One of Bernanke's first challenges as Fed chief will be deciding when to end the central bank's nearly 2-year-old rate-raising campaign, economists said.

The stakes are high. If he stops too early, inflation could become a problem, it he stops too late, the economy could be hurt. The first interest-rate meeting Bernanke will preside over will be on March 28.

Clues on Bernanke's thoughts about the future course of interest rates could come on Feb. 15 when he delivers the Fed's twice-a-year report on the economy to Congress.

Bernanke takes over as the economy faces some potential challenges.

Questions persist whether the housing market will continue to gradually decline and avoid a crash; and whether foreigners will maintain a hardy appetite for investing in the United States and continue to finance ballooning budget and trade deficits.

Energy prices pose another wild card for the economy — and for inflation.

Bernanke has the academic credentials for the Fed job, although he never worked on Wall Street and has limited political experience.

He will need to build support among his Fed colleagues — not only on interest rate policies but on other matters that the bank may confront down the road.