Goldman Sachs reports low equity risk premiums in US and global markets

Goldman Sachs has released new estimates regarding equity risk premiums in global stock markets. In the United States, investors are currently demanding a premium of approximately 3% above risk-free rates, a level described as historically low. This low demand for risk premiums is contributing to global stock valuations remaining at historically high levels.

In contrast, the realized risk premium over the last decade has reached approximately 14%, significantly exceeding what investors have currently requested. Regional variations are notable; while premiums are highest in parts of Asia (excluding Japan), Japan currently shows risk premiums lower than those in the United States. These valuation trends and premium gaps have significant implications for market expectations, including those surrounding the impact of artificial intelligence.