The signs of bubbles emerging in financial markets are clear to see. The Dow Jones index recently surpassed 40,000 for the first time, and the UK FTSE 100 and French CAC 40 also have reached new highs. Forward price-to-earnings ratios in the United States are trading at a multiple of around 25—well above the historical average of 16—and these high valuations have persisted despite interest rates above 5%.