We discussed the term structure and yield curve last week. Currently, yields on shorter-term and longer-term U.S. government bonds have been converging rapidly, stirring fears and skepticism that the bond market is close to signaling a looming recession (please refer to the article: "Flattening Yield Curve Stirs Recession Debate" under the reading assignment folder).

So, in what circumstances are yield curves upward-sloping? Why are some analysts and investors not concerned about the shape of the yield curve? In your opinion, will the economy be in trouble in the next 6-12 months? Please discuss.