US Excess CAPE Yield
Current Excess CAPE Yield
As of June 2026 · %
By Dominic Roe · Data Engineer & Business Intelligence Developer Updated June 2026
- Historical average
- 4.59%
- 1746 months
- Historical median
- 3.30%
- Percentile rank
- 22nd percentile
- vs full history
- All-time range
- -2.58% – 23.53%
- Last updated
- June 2026
- since January 1881
Understanding this metric
What is it?
The Excess CAPE Yield (ECY), devised by Robert Shiller with Laurence Black and Farouk Jivraj, measures how much extra return US equities offer over safe government bonds. It is the cyclically adjusted earnings yield of the stock market — the inverse of the CAPE ratio — minus the real yield on 10-year US Treasuries. A higher ECY means stocks look more attractive relative to bonds; a low or negative reading means they look expensive relative to bonds.
How is it calculated?
ECY = (1 ÷ CAPE) − real 10-year Treasury yield. The first term is the CAPE earnings yield, the smoothed, inflation-adjusted earnings the market yields at today's price; the second is the 10-year Treasury yield adjusted for expected inflation. The series shown is taken directly from Robert Shiller's published 'Excess CAPE Yield' column, monthly. A reading of 3% means the market's cyclically adjusted earnings yield exceeds the real bond yield by three percentage points.
Historical interpretation
Unlike CAPE on its own, the ECY judges stocks against the main alternative — bonds. Because it nets off the real interest rate, it can stay reasonable even when CAPE is high, provided bond yields are low. Historically a higher ECY has been associated with stronger subsequent equity returns relative to bonds. Read it against its own history rather than a fixed threshold, and remember a positive ECY signals relative, not absolute, value — it does not rule out poor returns from both stocks and bonds.
Limitations
ECY inherits CAPE's weaknesses — the 'normal' earnings level shifts with profit margins, accounting and index composition — and adds those of the bond leg: it depends on a particular real-yield calculation and ignores credit, duration and inflation surprises. It compares two long-run yields and is not a market-timing signal; a high ECY driven mainly by very low bond yields can erode quickly if rates rise.
Frequently asked questions
What is the Excess CAPE Yield?
It is the stock market's cyclically adjusted earnings yield (1 ÷ CAPE) minus the real 10-year Treasury yield. In plain terms, it estimates the extra long-run return equities offer over government bonds — a way to judge whether stocks are cheap or expensive relative to bonds, not just in absolute terms.
Why subtract the bond yield from the earnings yield?
Because a high CAPE can be more justifiable when interest rates are low. By netting off the real bond yield, the ECY adjusts for the rate environment, so it answers 'are stocks attractive given what bonds pay?' rather than 'are stocks expensive versus their own history?'.
Does a positive Excess CAPE Yield mean stocks are cheap?
It means stocks look attractive relative to bonds, which is different from cheap in absolute terms. A positive ECY has historically pointed to equities outperforming bonds over the long run, but both can still deliver weak real returns. Use it alongside absolute gauges like CAPE.
Is the data real?
The site clearly labels every series as either real imported data or generated sample (mock) data. The ECY series is taken from Robert Shiller's published workbook. Sample data, where shown, is for demonstration only and must not be used for investment decisions.
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