{
  "id": 2460742,
  "title": "Is the Fed’s stock valuation model working again?",
  "url": "https://urgent.news/2026/08/22/is-the-feds-stock-valuation-model-working-again",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-22T00:37:50.000Z",
  "source": {
    "name": "Investing.com",
    "slug": "investing-com",
    "url": "https://www.investing.com/news/stock-market-news/is-the-feds-stock-valuation-model-working-again-4872237"
  },
  "original_language": "en",
  "account": null,
  "summary": "The Federal Reserve's stock valuation model may be regaining relevance as Treasury yields are no longer suppressed by quantitative easing, according to Yardeni Research. This model compares the S&P 500's forward earnings yield to the 10-year U.S. Treasury yield, with stocks considered undervalued when their earnings yield exceeds the government bond yield. In recent months, the model has shown the S&P 500 to be slightly undervalued, with the 10-year yield at 4.68% and a reciprocal of 21.4 compared to the S&P 500's forward P/E ratio of 19.9. This suggests the index remains slightly undervalued under the model, with an estimated fair value of around 8,300. However, higher yields above 5% could pose a risk to equities, while a recession could exacerbate the downside. Yardeni's base case calls for the 10-year yield to remain between 4% and 5%, with an 80% probability assigned to the \"Roaring 2020s\" economic scenario. The risks include persistent inflation, widening federal deficits, and rising government debt.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}