The bond market is creating a puzzle for investors. Even though Treasury bonds fell on Tuesday after strong economic data, the market has not reacted as might have been expected for this stage of the cycle.

On Monday, the yield curve inverted at the short end, with two-year yields moving higher than the five-year issue; they were still slightly higher on Wednesday. The gap between two-year and 10-year yields, probably the most closely watched relationship, has narrowed to a few basis points.