There's been barely any FRR swaps taken in days, so it would seem that the fixed-rate market is in fact setting the going rate at the current level, and the FRR as a system is mostly just taking a giant chunk of supply and keeping it safely tucked away out of sight so that it can't wipe away the limited amount of demand.
And this with the price of bitcoin finally showing some signs of rising... can't tell if that's a collective statement of "Bullshit, it's going to be back to bear-town any day now", or a sign that even with an uptick the supply of funding is outpacing the need for funding, or just a result of people saying "Trading? Not right now, it's christmastime".
Just because FRR aren't being taken doesn't mean they aren't contributing to supply. As I stated earlier, the Fixed rates are pegging themselves to FRR (minus a tiny amount to put them TOB), but FRR is pegged to market rate (determined by fixed rates). Just having all those orders on the books drives down price, just like any other order book. If BTC price was rising, you'd expect lending rates to increase. The simple fact is, FRR are lazy investors and they're driving down rates, just like lazy whales always do. Hell, I wouldn't mind if Bitfinex just scraped FRR. It sucks as a borrower, too, because your rates are always fluctuating. As a lender, it sucks because you'll never get your order taken.