The $10 trillion market for U.S. Treasuries is signaling that the economic recovery may be poised to weaken even as consumer confidence rises toward pre-recession levels.

Yields on 10-year Treasury notes, the benchmark for everything from mortgage rates to corporate bonds, fell as low as 1.89 percent yesterday, down from this year's high of 2.09 percent on Jan. 23, according to data compiled by Bloomberg. The yield averaged 2.76 percent in 2011 and 3.19 percent in 2010.

The jobless rate has fallen to the lowest since February 2009, and the Conference Board said its gauge of consumer sentiment is the highest level in a year. Bond investors are focused on Europe's sovereign-debt crisis, oil prices that exceed $100 a barrel again and home prices that have dropped to the lowest level since 2003.