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Bond market signals economic slowdown, or worse

There is no perfect economic crystal ball, but the bond market often gives a indication of where the economy is heading.

Traders work after the closing bell at the New York Stock Exchange in August.
Traders work after the closing bell at the New York Stock Exchange in August.
Johannes Eisele/AFP/Getty Images

There is no perfect economic crystal ball, but the bond market often gives a indication of where the economy is heading. And lately, the bond market has been warning of a potential recession on the horizon. As investors have moved out of riskier assets into so-called safe havens, like Treasurys and even gold, bond prices have been rising and yields falling, especially for longer-term bonds.

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