By Ven Ram, Bloomberg The selloff in US stocks this year means that they are now more attractive relative to bonds, according to the Fed Model. Still, the S&P 500 Index may get even cheaper if slowing growth and burning inflation mean corporate earnings trend lower while the Fed keeps raising rates. The estimated earnings yield on the S&P 500 is about 5.95%, meaning that investors in stocks get to earn some 300 basis points more than what they get from 10-year Treasuries chart shows. Given that spread, the Fed Model would posit that stocks are undervalued. However , the gap widened far more emphatically in the aftermath of the recession triggered by the financial crisis, and the current spread is less than the average of 380 basis points since then. The Fed Model fails to address the premium that investors require to hold riskier equities rather than Treasuries that are, to all intents and purposes, free from default risk. In fact, given the current macroeconomic backdrop, in