The difference in yield between Treasuries due in five years and those maturing in three decades tumbled Tuesday to as low as 96 basis points this morning, the narrowest since December 2007.

The last two times the US yield curve was this 'flat' (Mar 01, Dec 07), the US economy officially entered a recession.

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As Bloomberg notes, shorter-term U.S. debt has underperformed this week as Federal Reserve officials reiterated plans to stick to their path of rate hikes, even as market-based measures of inflation expectations fall. Five-year Treasury notes are among the most sensitive to the Fed policy outlook, but it appears the yield curve is just not falling for The Fed's growth hype pitch...

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...but, but, but, it's different this time...