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The yield curves are not headed in a good direction, historically speaking. The blogger picks up all the nuances of short term rates heading higher while long term rates stay flat.

Consensus market opinion presently holds that the yield curve is too low and too flat. The following from the latest Investment Outlook by Bill Gross:

While typically the yield curve flattens as the Fed marches upward, it does so by intermediate and long yields going up less than short rates. What they call bull flatteners (long rates going down) are as rare as Ahi tuna that never hits the grill. How then to explain it, and is there an irrationality to this market that speaks to overvaluation or perhaps even a bubble?

Gross then explained that the low bond yield and flattening curve are caused mainly by (1) Asian Central Banks recycling their Dollars into US Treasuries to suppress their currencies and (2) the carry trades of speculative hedge funds.

What I find most curious is no one mentions the simple reason that may be bond yields are low because the underlying US economy is weak. Just maybe the US economy is on the verge of rolling over (see Confounding The Experts - A Gutsy Bond Bull). Maybe it's because the US economy is so highly leveraged that it simply cannot handle high long rates (see US Credit Situation).

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Read more from this blogger: Investor's Diary: The Conundrum - Low Bond Yields