The bond market is trying to tell us something: The yield curve keeps inverting, flashing a warning sign that a recession could be coming.

And the yield curve inverted again today. An inverted yield curve is when shorter-term rates are higher than longer-term bond yields. This doesn't happen often. Before this month, the key 2 year/10 year rates hadn't inverted since 2007, just before the Great Recession.

Why does this matter? Inverted yield curves have preceded every US recession in the modern era.

Smart take: Yield curve inversions are a sign of just how nervous investors are about the immediate outlook for the economy. They are demanding higher rates for short-term loans, which is not normal.

Typically, investors expect to get paid a higher rate of return when they are lending money for a longer period of time, because the risks are higher.