This Market Indicator Predicted the Last 7 Recessions. It’s About to Flash Red Again

The stock market may be near record highs. But one of the bond market's best-known economic indicators suggests a recession could be little more than a year away.

The yield curve, which tracks the difference between 10-year and short-term rates, like the 2-year Treasury yields, has narrowed to levels not seen since August 2007. The 10-year’s yield is currently at 2.98%, just 0.36 percentage points difference from the 2-year’s 2.62%.