To Citigroup Inc., the chances are slim that the United States will enter a recession anytime soon. Officials at the Federal Reserve feel the same way.

Yet both camps agree that an inverted Treasuries yield curve would be an ominous sign for growth. And with the latest bout of flattening, the reality of sub-zero spreads may soon collide with an otherwise sanguine outlook on the economy.

The yield curve from 5 to 30 years has flattened to about 30 basis points, the narrowest spread since 2007. From 2 to 10 years, the gap of 42 basis points is also the smallest in more than a decade. For extending to 10 years from 7, investors pick up a mere 3.5 basis points, less than a quarter of what they got a year ago.