The two-year Treasury yield hit its highest level in nearly a decade Monday morning, leaving investors questioning what this could signal for America's economy in the longer term.
The short-term Treasury yield rose to 2.386 percent on Monday morning — the highest level on record since August of 2008. Meanwhile, the 10-year Treasury yield also rose to a three-week high at 2.86 percent. Yields move inversely to bond prices.
The move came as the U.S. and Russia avoided any direct conflict in Syria following airstrikes by Western nations on Saturday morning. But, the sell-off in bonds left some investors feeling nervous that it could spell trouble for the U.S. economy. Every time the short-term yield comes closer to the 10-year — in what market participants describe as "flattening of the yield curve" — there are worries that an economic recession could be on the horizon. This is because higher short-term yields suggest that inflation and interest rates are expected to remain low for a while.