One of the missions of the Office of Financial Research is to analyse asset market valuations and if there are excesses, explore the potential financial stability ramifications of a sharp correction. The author argues that U.S. stock prices today appear high by historical standards. Although he notes that the financial stability implications of a market correction could be moderate due to limited liquidity transformation in equity markets, he addresses other financial stability issues that may be more relevant, such as leverage, compressed pricing of risk, interconnectedness, and complexity.