US Fed Warns of “Extreme Point of Overvaluation”

Posted | 22/06/2016 / Views | 3078
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The very institution largely responsible for the illogically big gains in US shares since the GFC, courtesy of unprecedented money printing and zero interest rates, somewhat ironically, last night told the market that shares were overvalued…  From US Fed Chair Yellen:

“Forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades.”, and

“investors should understand that beneath the surface of this short-term outcome is singularly the most extreme point of overvaluation for the median stock in history.”

As Yellen said, and per the chart below, we’ve been at historic extremes for nearly a year now.  You’ll spot the 2 instances when we had those little ‘hiccups’ last August/September and this February.  We are back now, higher than ever.  Will the next ‘event’ be a hiccup/correction or a crash?


US Fed Warns of “Extreme Point of Overvaluation”