Traders work on the floor of the New York Stock Exchange.

Though it has looked like last year's recession scare was a false alarm, the bond market is close to sending another signal about a downturn.

The yield curve, or the spread between bonds of various maturities, is tightening again, with the gap between the three-month and 10-year Treasury notes less than 5 basis points Wednesday.

When the three-month tops the benchmark 10-year yield, that's called an inverted yield curve and has been a strong sign since 1950 that a recession is coming in the next 12 months.

The curve inverted last May but then reverted in October, seemingly allaying worries that the longest expansion in U.S. history was nearing a close. The curve briefly inverted Tuesday morning.

The New York Fed tracks the relationship and establishes a probability based on the spread. As 2019 ended, the recession chance stood at 23.6%, still elevated but a far cry from the nearly 40% reading as the curve inverted.