This Recession Predictor Just Hit Levels Not Seen Since 2007

The bond market is sending a loud signal: There’s a recession on the horizon.

Yields on 10-year U.S. treasuries have fallen below yields on three-month government notes. With yields on the 10-year at 2.245%, and yields on the three-month at 2.369%, the current yield gap is the widest it has been since 2007. Such “inversions” are worrisome since the only reason investors would pay less for short-term bonds than long-term ones is if they fear the future is bleak.

Bond prices and ...