Bonds are even more expensive by historical comparison than stocks.

Compare bond and stock valuations in early January 2021, each against its own history. For bonds, use U.S. Treasury yields (nominal and real) and, if relevant, global sovereign yields. For stocks, use CAPE, P/E or market cap to GDP. Rank each by historical percentile or by standard deviations from its long-run mean. True: bonds were at or near their most expensive on record (for example record-low yields) and more extreme than stocks. Mostly true: both were extremely expensive, with bonds somewhat more extreme on most measures. Mixed: the measures disagree, or the two were about equally extreme. Mostly false: stocks were more extreme on most measures, though bonds were also very expensive. False: bonds were not historically expensive, or were clearly less extreme than stocks on all standard measures.

Set before the research began.

1. E1 VIEWPOINTS: Waiting for the Last Dance: The Hazards of Asset Allocation in a Late-stage Major Bubble GMO (Jeremy Grantham viewpoints) · 5 January 2021 Own record

   “shows less impressive overvaluation when compared to bonds. Bonds, however, are even more spectacularly expensive by historical comparison than stocks. Oh my!”

2. E2 VIEWPOINTS: Waiting for the Last Dance: The Hazards of Asset Allocation in a Late-stage Major Bubble GMO (Jeremy Grantham viewpoints) · 5 January 2021 Own record

   “Today the P/E ratio of the market is in the top few percent of the historical range and the economy is in the worst few percent.”

3. E3 How expensive is the stock market? CDES (Shiller PE dashboard using Robert Shiller's dataset and FRED yields)

   “The lowest was −2.58% in Jun 1892, when deflation lifted real bond yields; in the dot-com boom it reached −1.52% in Jan 2000.”

4. E4 DGS10: 10-Year US Treasury Yield Daily Data Since 1962 Eco3min

   “DGS10 briefly touched 0.52% in August 2020, its all-time low, as the Fed cut rates to zero and launched unlimited QE in response to COVID-19.”

5. E5 DGS10: 10-Year US Treasury Yield Daily Data Since 1962 Eco3min (mirror of FRED series DGS10) · 16 March 2026

   “DGS10 briefly touched 0.52% in August 2020, its all-time low, as the Fed cut rates to zero and launched unlimited QE in response to COVID-19.”

6. E6 How expensive is the stock market? cdes.com (Shiller PE dashboard using Robert Shiller's dataset) · 28 October 2026

   “| Jan 2021 | 34.51 | 3,793.75 | +96.1% (14.4%/yr) |”

7. E7 How expensive is the stock market? cdes.com (Shiller PE dashboard using Robert Shiller's dataset) · 28 October 2026

   “| Jan 2021 | 2.90% | −0.66% | 3.55% | 3,793.75 | +96.1% (14.4%/yr) |”

8. E8 Waiting for the Last Dance: The Hazards of Asset Allocation in a Late-stage Major Bubble GMO (Jeremy Grantham viewpoint) · 5 January 2021 Own record

   “The "Buffett indicator," total stock market capitalization to GDP, broke through its all-time-high 2000 record.”

9. E9 Table Data - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis Federal Reserve Bank of St. Louis (FRED), data from Board of Governors H.15 release

   “| 2021-01-01 | 1.08 |”

10. E10 1. Asset Valuations Board of Governors of the Federal Reserve System (Financial Stability Report, November 2020) · 16 November 2020

    “Treasury yields across the maturity spectrum have generally changed little since May and are near historical lows (figure 1-1). Model estimates of Treasury term premiums remain at record lows (figure 1-2).”

11. E11 CAPE (P/E10) Version of Fed Model? CXO Advisory · 30 December 2020

    “From a low of 23 in late March 2020, U.S. CAPE rebounds to 32 (about the 90th percentile of full history values) by the end of September 2020.”

12. E12 1. Asset Valuations Board of Governors of the Federal Reserve System (Financial Stability Report, November 2020) · 16 November 2020

    “Prices relative to forecasts of corporate earnings have also risen considerably and are currently near the top of their historical distribution”

On the bond side, the 10-year Treasury yield was 1.08% in January 2021 (E9). Its all-time low since 1962 was 0.52% in August 2020 (E4/E5), and in November 2020 the Fed reported Treasury yields "near historical lows" and term premiums "at record lows" (E10). That puts bonds at or near their most expensive on record. On the stock side, the Shiller PE was 34.51 in January 2021 (E6), CAPE was about the 90th percentile of its history in late September 2020 (E11), and the Fed put forward P/Es "near the top" of their historical range (E12). These are extreme readings but not clearly records on the independent measures; the claim of a record market-cap-to-GDP comes only from Grantham's own paper (E8). Real-yield figures in the evidence are unlabelled (E7) or not tied to a clear measure (E3), so they were not used, and the evidence does not settle every measure; on the measures it does cover, bonds look somewhat more extreme than stocks.