US Buffett Indicator
Current Buffett Indicator
As of January 2026 · % of GDP
By Dominic Roe · Data Engineer & Business Intelligence Developer Updated January 2026
- Historical average
- 86.1%
- 302 months
- Historical median
- 72.1%
- Percentile rank
- 99th percentile
- vs full history
- All-time range
- 32.2% – 228.7%
- Last updated
- January 2026
- since October 1947
Understanding this metric
What is it?
The Buffett Indicator compares the total value of the US stock market to the size of the US economy. Named after Warren Buffett — who called market value relative to GDP “probably the best single measure of where valuations stand at any given moment” — it expresses aggregate market capitalisation as a percentage of GDP.
How is it calculated?
It divides US equity market value by gross domestic product, expressed as a percentage. We use the Federal Reserve's Z.1 Financial Accounts measure of US nonfinancial corporate equities (series NCBEILQ027S) — the most consistent free, long-history proxy since FRED retired the Wilshire 5000 market-cap series in 2024 — over nominal quarterly GDP, both from FRED. It tracks close to the broader, total-market versions of the ratio published elsewhere. A reading of 200% means the market is worth about twice annual economic output.
Historical interpretation
Higher readings indicate a more expensive market relative to the economy; lower readings a cheaper one. As with other valuation gauges, read it against its own history — the average, median and percentile rank above — rather than an absolute threshold. It has drifted structurally higher over the decades, so comparisons to mid-20th-century levels overstate how expensive today's market looks.
Limitations
The ratio sets a market value (a stock) against annual GDP (a flow) and ignores interest rates, profit margins, and the large foreign earnings of US-listed multinationals, which lift market cap relative to domestic output. Its 'normal' range moves over time, so it is a context gauge, not a precise fair-value or market-timing signal.
Frequently asked questions
What is a high Buffett Indicator reading?
There is no fixed threshold. Readings well above the long-run average — and in a high percentile of the metric's own history — point to a relatively expensive market. Compare to history rather than to a single number.
Why is it called the Buffett Indicator?
Warren Buffett highlighted the ratio of total market value to GDP in a 2001 Fortune article as a strong gauge of overall valuation, and the name stuck.
How is it calculated on this page?
US nonfinancial corporate equity value (the Federal Reserve Z.1 series NCBEILQ027S) is divided by nominal GDP, expressed as a percentage. Both series come from FRED and are quarterly, so the indicator updates each quarter.
Is the data real?
The site clearly labels every series as either real imported data or generated sample (mock) data. Sample data is for demonstration only and must not be used for investment decisions.
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