Fed Stock Valuation Model: S&P 500 Earnings Yield vs. 10-Year Treasury Yield
Real-Time Equity Risk Premium (ERP) Spread Tracker, Historical Valuation Regimes, and Macroeconomic Equilibrium (1990–2026)
S&P 500 Earnings Yield
3.84%
P/E Multiple: 26.0x
10-Year Treasury Yield
4.67%
FRED Series DGS10
Equity Risk Premium Spread
-83 bps
Earnings Yield minus 10Y Yield
Historical Valuation Regime
TIGHT ERP
8th Percentile (Bonds Favored)
The S&P 500 earnings yield currently registers at 3.84% against a benchmark 10-Year Treasury yield of 4.67%, maintaining a negative Equity Risk Premium spread of -83 bps. This indicates that risk-free sovereign debt yields approximately 83 basis points more than the earnings yield of the broad equity market, placing relative equity valuations in the 8th percentile over the last 35 years.
Read Master Concept Guide: Earnings Yield vs Treasury Yield: The Fed Stock Valuation Model Explained →Historical Macro Cycle Benchmarks & Inflection Points
Pre-rendered empirical time-series data table for search engine verification and cycle benchmarking.
| Market Cycle Phase | S&P 500 Earnings Yield | 10Y Treasury Yield | ERP Spread | Valuation Regime |
|---|---|---|---|---|
| March 2000 (Dot-Com Peak) | 3.30% | 6.26% | -296 bps | Extreme Overvaluation |
| October 2002 (Tech Bust Trough) | 5.88% | 3.94% | +194 bps | Equities Undervalued |
| October 2007 (Pre-GFC Peak) | 5.41% | 4.53% | +88 bps | Fair Value Equilibrium |
| March 2009 (GFC Market Trough) | 7.69% | 2.82% | +487 bps | Generational Equity Buy |
| August 2020 (Post-COVID ZIRP) | 3.57% | 0.65% | +292 bps | TINA Regime (Equities Favored) |
| October 2022 (Rate Shock Lows) | 5.56% | 3.98% | +158 bps | Normalization Phase |
| September 2026 (Current Live) | 3.84% | 4.67% | -83 bps | BARP Regime (Bonds Favored) |