The yield curve of the US Treasury turned in 1966 and 1998. Guess what? There was no recession.
In today's world of ultra-low interest rates, there are unusual structural forces that drive long-term bond yields that help explain why the interest rate on two-year securities traded over 10 – Bond yields for the first time in 12 years.
Yellen said, "Historically, [the yield curve inversion] is a pretty good signal for a recession and I think that's when the markets pay attention to it, but I would really insist if it could be a less good signal.
"The reason for this is that there are a number of factors, other than market expectations for the future path of interest rates that drive long-term profitability."
These are some of the probable reasons that Yellen probably did not points to a recession, as the inverted yield curve implies.
First, the central banks have purchased huge amounts of government bonds – artificially suppressing long-term income.
The three largest central banks in the world – the US Federal Reserve, the European Central Bank and the Bank of Japan – have combined assets of $ 14.2 trillion in their balance sheets.
Although the Fed's balance sheet has shrunk, the Council of Justice is adding to its asset purchases.
Therefore, Australian Reserve Deputy Governor Guy Debell said on Thursday: "I'm not sure I would count on the yield curve as the best signal for this risk, given that the yield curve is obviously not is the same
The "forward premium" – investors with additional returns usually require the risk of holding long-term bonds – can be "negative", he said.
Second, the aging population is also bidding for fixed income securities from retirement funds and life insurers as they attempt to manage their long-term assets and liabilities.
Third, inflation seems structurally lower due to the tectonic forces of globalization and the digitization of the economy.  Consequently, neutral central bank interest rates are lower than in the past, which means that the yield curve is naturally flatter and easier to invert.
However, the risks remain
However, the obvious risks to the global economy are mainly due to the trade and technological war between the US and China, which Fat warned has slowed business investment around the world.
Economic growth slows down in China and Europe, with Germany struggling to avert recession – defined as two consecutive quarters of negative economic growth.
Thus the justification for why "this is different" in the bond market will do little to prevent investors' fears around the world.
As former political adviser to President Bill l Clinton, James Carville once famously said of his preferred incarnation: "I want to come back as a bond market – you can intimidate everyone."