Primer Update: How We Use the Fed Valuation Model
Is the stock market overvalued or undervalued? One way we can answer this question is by using the Fed’s valuation model for stocks, comparing the earnings yield of an index (the inverse of the P/E ratio) to the yield of the 10-year Treasury Note.
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Our Research — February 12, 2004
Primer Update: How We Use the Fed Valuation Model Is the stock market overvalued or undervalued? One way we can answer this question is by using the Fed’s valuation model for stocks, comparing the earnings yield of an index (the inverse of the P/E ratio) to the yield of the 10-year Treasury Note.