• Irrational exuberance is unfounded market optimism that lacks a real basis in fundamental valuation and instead relies on psychological factors.

  • The term was popularized by former Fed Chairman Alan Greenspan in a 1996 speech addressing the growing Internet bubble in the stock market.
  • Irrational exuberance has become synonymous with creating inflated asset prices associated with bubbles that eventually burst and can lead to market panics.