This slowing in debt assumption and expenditures has helped keep inflationary pressures in general at bay on a relative basis. Tax cuts and the spending of the theoretical government surplus is clearly burning a hole in political pockets. History says no. Sure they should. As in any bull market, it's just a simple question of degree.
Valuation is always in the eye of the beholder.
The high multiples anticipated perfectly the improved profit performance to follow. In the aggregate, valuations have expanded tremendously over the course of this bull market. The real question, as is the question in every bull market turned euphoric event episode, is how high is too high. Given that the rate of change of the rate of change in corporate profitability is beginning to falter and perceptions of inflation are beginning to move from complacency to concern, valuations in many areas of the market that were very stretched have begun to contract. Some contraction has been violent.