irrational exuberance - Investment & Finance Definition
A phrase uttered by Federal Reserve Chairman Alan Greenspan in December 1996 to refer to the stock market’s phenomenal gains. At that point, the Dow Jones Industrial Average was below 6,500. The comment caused the stock market to drop sharply the next day as traders were afraid that Greenspan’s concerns would lead the Federal Reserve to take actions to stop the market’s climb, such as raising interest rates or limiting the amount of margin, or borrowed funds, that investors could obtain from their broker when buying stocks or other investments. The phrase was often repeated as the market continued to climb to record highs through early 2000.