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High Valuations and Low Interest Rates

Shiller Price Earnings (P/E) Ratio for the S&P 500 vs. Long-Term Interest Rates

Cyclically-Adjusted P/E Ratios are 38% higher than the long-term average, suggesting that market valuations are stretched.

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Data from 01/01/62-12/01/20.

Source: multpl.com and macrotrends.net. Shiller P/E is also known as CAPE (Cyclically Adjusted Price to Earnings Ratio) Ratio). It is defined by the average of ten years of earnings (moving average), adjusted for inflation.

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