What is the bond market trying to tell us about the economy?

Many investors focus on the stock market. But the bond market’s been doing some interesting things lately, things that are getting investors’ and economists’ attention. Since the beginning of this year, there’s been a decided flattening of the yield curve on Treasuries — the difference between the interest rates on short-term bonds and those that won’t mature for 10 or even 30 years. That could be an indicator of something big happening in the economy, maybe a change of direction away from more economic growth and toward that not-so-popular-word that begins with ‘R:’ recession.

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