Yield curves are flattening

Yield curves are flattening around the world, which with short-term rates already at zero means the long end is coming down, the markets do not fear inflation (yet) and growth, while meager, is still there. Until short-term yields - on two-year Treasury notes, for example - start to rise, the bond market will not be signaling a return to growth. If longer-term yields turn around and begin to rise without a pickup in growth, it will mean that inflation is returning as a concern. If, on the other hand, longer-term yields fall and growth picks up, the Fed will have threaded the needle and kick-started a recovery