The real rate still pricing a pivot
Source: wwww.tradingview.com
The US 10-yr real rate is pricing in less risk.
The US 10-yr real rate (top chart) has moved into its bearish channel between the lower blue and red bands. One interpretation here is that market participants see lower risk ahead and require a smaller rate of return.
This is corroborated by FXCM's USDOLLAR basket. It is also trading in its bearish channel (middle chart). The greenback is a haven. That it trades lower suggests money rotating out of safety.
The two series are positively correlated, with the current correlation coefficient at 79% on a weekly scale.
Of interest is the squeeze in the real rate's Bollinger bands (vertical green rectangle). This suggests lower volatility. Bollinger theory sees this as the proverbial calm before the storm, i.e., low volatility precedes an expansion in volatility.
The M top (black trend lines) suggests the expansion is likely to be to the downside. The longer the real rate trades in the bearish channel, the greater the chance that this is the case.
This suggests a Fed pivot remains a possibility despite any push back by Fed officials.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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