The ever flatter US yield curve may indicate the long recovery could end soon, or may simply reflect the distortions created by the central bank’s asset purchase programmes.

The term premium, measured by the differential between two-year Treasury yields and 10-year yields, has progressively narrowed since early 2014. It stood at 32 basis points on July 24, the lowest level since August 2007, according to the US Department of the Treasury. A flat or inverted curve, when short-term yields are