Animal Spirits Trend 2026

In economics, "animal spirits" refers to the emotional and psychological factors—like confidence, fear, and optimism—that drive consumer and investor decisions, often overriding rational calculation. This concept, popularized by John Maynard Keynes, explains market volatility and business cycles. It is used by analysts to forecast economic trends and by policymakers to gauge market sentiment. Ultimately, investors, economists, and central banks benefit by understanding how collective mood shapes financial outcomes.