On the program today, the bond market, AI, small businesses, and Botox in that order.

From American public media, this is Marketplace.

In Los Angeles, I'm Kai Rizzdahl. It is Tuesday today. This one is the 9th of December. Good as

always to have you along, everybody. We all want to know which way the economy's going, right? I think

that's a pretty uncontroversial thing to say. And to find out, you could, for instance, ask an economist friend

what they think, maybe a Wall Street banker, if you know one, or better yet, a small business

person. You could also clue into the Federal Reserve tomorrow when the central bank is going to

release its summary of economic projections where they think rates and a bunch of other

parameters are headed. You could also, though, if you are of a mind, look at the bond market.

Demand for short-term treasury bills and longer-term bonds at either end of what is known as the

yield curve can tell us a lot about what investors are expecting. But there is a part of that yield curve

that we don't often talk about, medium-term treasury, sometimes known as the belly of the curve.

And as marketplace is Justin Ho reports now to get us going, that belly has been sending some

signals of its own. The government issues treasuries that mature in anywhere from less than a year to 10 and even 30 years.

So the belly of the curve is basically everything in the middle.

We tend to focus on two-year and five-year notes.

That's Chris Lowe, chief economist at FHN Financial.

He says yields on treasuries in that belly of the curve are influenced by what investors

expect the Federal Reserve to do in that two to five-year time frame. They anticipate.

So when we talk about the Fed might cut rates at an upcoming meeting or they might not,

well, we're anticipating not just the next one, but the next several years worth.

Investors know that the Federal Reserve is still trying to bring rates down to a neutral level to support full employment and stable inflation.

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