That's why warning lights started flashing Friday morning when the yield on the 10-year Treasury note slipped below that of the three-month bill. Here is what that means.
"There's growth concerns coming from everywhere - from Germany to the US", said Benjamin Lau, chief investment officer of Irvine, California-based Apriem Advisors, which manages around $740 million.
"The problem right now is that investors are willing to be paid less to wait longer - an indication that they don't have much confidence in the long term outlook for the U.S. economy", says BBC New York business correspondent Michelle Fleury.
They are considered the world's safest securities because they are backed by the full faith and credit of the US government. The bonds, known as Treasuries in the U.S., are issued as a form of borrowing by governments to fund spending. They also serve as a proxy for interest rates.
In normal circumstances, it has an arcing, upward slope because bond investors expect to be compensated more for taking on the added risk of owning bonds with longer maturities.
The spread between the three-month and 10-year Treasuries had recently dipped below 10 basis points for the first time since September 2007.
If you are anything else besides the yield curve today, the market doesn't care. The 10-year yield of 2.43 per cent is still above the two-year yield of 2.31 per cent.
The curve overall has been flattening for some time.
And not every part of the yield curve is inverted.
One of the most closely watched predictors of a potential recession just yelped even louder. Inversion is widely considered a reliable harbinger of recession in the U.S. The 10-year slipped to as low as 2.439 percent. It offered a false signal just once in that time.
And if the economy ultimately does end up rolling over, price gains on holding longer-term Treasuries would be a better bet.More news: US Economy Solid Despite Fed Policies Hindering Growth
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Under these circumstances, companies often find it more expensive to fund their operations and executives tend to temper or shelve investments.
"In many respects, the US 10-year Treasury is still, in an low-yielding world, a high-yielding asset", Dryden said.
The economy eventually contracts and unemployment rises. The yield curve inverts when spreads fall below zero basis points.
It seems illogical. Economists call it an "inverted" yield curve.
A yield curve inversion does not predict the length or severity of a downturn.
The data compounded worries about the US economic outlook after the Fed on Wednesday adopted a more dovish than expected stance, anticipating no further interest rate hikes this year and planning an end to its balance sheet roll-offs.
On the foreign exchange market, investors continued to buy the yen as a safe haven currency.
The US Federal Reserve signaled on Wednesday that it would not raise interest rates this year, pointing out that the pace of economic activity has slowed.
And he noted that on average, recessions occur 12 months after an inversion - not immediately.
"The data looks soft globally, particularly out of Europe".
Harvey won't actually forecast a recession unless the yield curve stays inverted for at least three months.