Fed Model

What does it Mean? A model thought to be used by the Federal Reserve that hypothesizes a relationship between long-term treasury notes and the market return of equities.
Investopedia Says... The Fed doesn't endorse this tool. In fact, it was named the"Fed model" by Prudential Securities strategist Ed Yardeni.

This model believes that returns on 10-year treasury notes should be similar to the S&P 500 earnings yield. Differences in these returns identify an over-priced or under-priced securities market.

Terms Related Links

Alan Greenspan
Earnings Yield
Fed
Financial Modeling
Loose Credit
Standard & Poor's 500 Index - S&P 500
Sweet Spot
Tight Monetary Policy
Treasury Note

Terms Related Links
The Federal Reserve - Few organizations can move the market like the Federal Reserve. As an investor, it's important to understand exactly what the Fed does and how it influences the economy.

Breaking Down The Fed Model - Learn what pundits mean when they say that stocks are undervalued according to the Fed model.

The Fed Model And Stock Valuation: What It Does And Does Not Tell Us - Learn about this popular stock market valuation model and how accurate it has been over the years.

Forces Behind Interest Rates - Get a deeper understanding of the importance of interest rates and what makes them change.

Forces Behind Exchange Rates - Find out how a currency's relative value reflects a country's economic health and impacts your investment returns.

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