Traders weigh U.S. recession risk as Treasury yields invert.

On Monday, the bond market displayed caution that the U.S. economy may face a recession as U.S. Treasury yields inverted once more.

The yield on the marginally decreased to 2.424%, while the benchmark increased by about 4 basis points to 2.412%. The yield on the moved up by 1 basis point to 2.56%, and the climbed by about 5 basis points to 2.473%. Yields move inversely with prices, and 1 basis point is equivalent to 0.01%.

On Monday, the 2-year and 10-year Treasury yields, which are closely monitored by traders, inverted once again. This occurred after the yields flipped on Thursday for the first time since 2019, following the release of closely watched jobs data.

The yield curve inversion is still the subject of discussion among investors, prompting debates about the impending recession, according to Mark Hackett, chief investment officer of research at Nationwide. Historically, an inverted yield curve has signaled the start of a recession. However, predicting the exact timing of a recession at this point is impossible.

"Although it is premature to become defensive, adopting a more conservative approach gradually is reasonable. In this climate, prioritizing quality over momentum-driven growth is prudent," he stated.

Although historically, an inversion in Treasury yields has preceded a recession, economists have stated that it is not a definitive predictor of an economic downturn. On Monday, both the 5-year and 30-year Treasury yields remained inverted, following a week ago's first inversion since 2006.

The Fed meeting minutes, to be released at 2 p.m. ET on Wednesday, will be the focus of investor attention this week.

On Monday, ING strategists predicted that the Fed would announce 50 basis point rate hikes at the May, June, and July meetings, according to a note they released.

"This should increase yields across the board and further invert the curve," they stated.

The Kremlin's stance on Crimea and Donbas remains unchanged, as Russia's chief negotiator Vladimir Medinsky announced that draft peace treaty talks will resume on Monday.

Russian forces have been accused of genocide by Ukrainian President Volodymyr Zelenskyy, who stated that Ukrainian people were being "destroyed and exterminated."

This market report was contributed to by Jesse Pound and Sam Meredith of CNBC.