Treasuries should hedge equities (negative correlation). When both sell off together, the classic portfolio stabilizer is failing.
DECOUPLED z = 2.85 ROBUST as of 2026-06-04
further toward dysfunction than ~100% of its own history
The dysfunction statistic, full history
Above the dashed zero line is the economically wrong direction — the
relationship failing to do its stabilizing job.
The two series it watches
SP500
2016
high 7,600 · low 2,001 · now 7,584 · 1 recession shaded 2026
DGS10
1962
high 15.06 · low 0.55 · now 4.47 · 8 recessions shaded 2026
How it is scored
Correlation today (r)
0.7021
z vs. its own history
2.85 on the Fisher-transformed (arctanh) correlation — effective N ≈ 5.8 independent windows (from 2,436 overlapping readings)
Rule, pre-committed
z < 1 BEHAVING · 1 ≤ z < 2 STRAINED · z ≥ 2 with the wrong economic sign, held 10 consecutive readings, DECOUPLED.
Confidence
ROBUST — The arithmetic is mechanical — a plain rolling correlation of daily moves, on arctanh-transformed values. But the NORM is regime-dependent: Treasuries hedging equities (negative correlation) is a ~25-year, low-inflation-era phenomenon. Before roughly 2000, stocks and bonds were often POSITIVELY correlated — both driven by inflation. FRED redistributes only ~10 years of S&P 500 data (licensing), so this statistic's reference window sits entirely inside the negative-correlation regime and cannot see the alternative. A positive reading today may be a regime change, not a failing stabilizer; read the state with that caveat.