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Our Research — December 31, 2002

A Primer on the Fed 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.

Open A Primer on the Fed 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.