How attractive are U.S. stocks relative to long-term Treasury yields?
CARP compares the cyclically adjusted earnings yield on U.S. equities with the 10-year Treasury yield to frame stock valuation relative to bonds.
Grizzly Bulls uses this indicator as one input in its systematic trading research. It provides context inside a broader rules-based process rather than acting as a standalone trading signal.
How expensive is the market right now?
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100Ruinous
BargainInexpensiveFairExpensiveRuinous
Cyclically Adjusted Risk Premium (CARP)
Indicator type
Valuation
Scale i
0 - 100
Absolute value range i
-2.87i to 5.54i
Available chart history
Jan 2, 1992 - Nov 9, 2026
Latest public reading
CARP is 100/100 (Ruinous), based on data as of .
Latest available snapshot · Public definition v1.0 · Updated
CARP compares the cyclically adjusted earnings yield on U.S. equities with the 10-year Treasury yield. Grizzly Bulls maps that relative valuation spread to a 0-100 scale where higher displayed readings indicate more expensive equity conditions.
Suggested citation: Grizzly Bulls, “Cyclically Adjusted Risk Premium (CARP),” 100/100 (Ruinous), data as of Nov 9, 2026.
CAPE by itself asks how much investors are paying for a decade-smoothed stream of earnings. CARP converts CAPE into an earnings yield and subtracts the 10-year Treasury yield, reframing valuation as the extra cyclically adjusted earnings yield offered by stocks over a long-term government bond benchmark.
The raw calculation is 100 / CAPE minus the 10-year Treasury yield. A larger raw spread means stocks offer more cyclically adjusted earnings yield relative to Treasuries. A smaller or negative spread means that relative cushion is thin.
Why the displayed scale runs the other way
Raw CARP rises as equities become cheaper relative to bonds. Grizzly Bulls reverses the 0-100 presentation scale so higher displayed scores consistently mean more expensive equity conditions, matching the direction used by NBI.
That makes CARP easier to compare with other valuation signals without changing the underlying spread calculation.
Where CARP can mislead
CARP is a relative valuation measure, not a market-timing rule. Treasury yields can move the spread even when stock prices are unchanged, and CAPE reacts slowly because it smooths ten years of earnings.
A historically extreme reading can persist. The indicator is most useful for understanding the valuation trade-off between stocks and bonds, not for identifying the exact date of a market turn.
Empirical calibration from the loaded history
These figures use the normalized observations in the selected chart range, from through . Longer ranges become available only when your account has access to that history.
1,188 observations
Low example
50.8
Dec 3, 2021
Median score
91.5
Selected sample
Average score
85.8
Selected sample
High example
100.0
Nov 6, 2024
Regime frequency in this sample
Regime
Observations
Share
Bargain
0
0.0%
Inexpensive
0
0.0%
Fair
82
6.9%
Expensive
367
30.9%
Ruinous
739
62.2%
These frequencies describe the selected historical sample. They are not probabilities for future returns or market turning points.
No indicator stands alone. Compare valuation, sentiment, broad macroeconomic conditions, and Treasury curve shape before treating any one reading as meaningful market context.
