The incredible shrinking interest rate

chart bond yields low

Good news if you still haven't refinanced your mortgage. The 10-year Treasury yield is hovering near its lowest levels since April of last year.

But that's not necessarily a great sign for the stock market or broader economy.

The benchmark 10-year Treasury is now just 1.82%. It was 2.33% as recently as late December -- shortly after the Federal Reserve raised short-term rates for the first time in nine years.

What's going on? Bond yields -- stop us if you've heard this Fixed Income 101 spiel before -- fall as bond prices rise. In other words, when people buy bonds, rates go down.

And people have been buying boatloads of bonds this year because they're scared out of their minds as oil prices collapse and China's economy slows down.

U.S. bonds are considered safe (or safer) investments at a time when the stock market is acting like it's 2008 all over again.

Two popular exchange-traded funds that track long-term government bonds, the iShares 7-10 Year Treasury Bond ETF (IEF) and iShares 20+ Year Treasury Bond ETF (TLT), are up 4% and 7% so far this year.

Related: Bank of Japan cuts rates into negative territory

And there is a case to be made for this bond rally to pull an Energizer bunny and keep going and going and going. That would push yields even lower.

That's because the rates for longer-term U.S. Treasuries are still -- strangely enough -- pretty high compared to other developed markets.

The 10-year yields for Germany and France are below 1%. Japan's is barely above zero and could go negative now that the Bank of Japan has cut short-term rates to subzero levels.

Switzerland's 10-year yield already has a big fat minus sign in front of it.

So if you're an investor that's desperate for some yield but too nervous to buy dividend stocks, junk bonds or emerging market debt, then Uncle Sam is still the guy to see.

Related: Many investors now expect Fed to hold steady for all of 2016

Fixed income analysts at Prudential wrote in a recent report that they expect U.S. rates "to remain below their highs of 2015 for some time to come."

The reasoning? The ECB and Bank of Japan are both in heavy stimulus mode. And expectations for further rate hikes from the Fed this year are decreasing with each passing day.

"Lower for longer" is the new mantra on Wall Street. Some bond traders should consider getting it tattooed on their arms.

Anthony Valeri, fixed income investment strategist with LPL Financial, said that it's possible for the 10-year Treasury to drift back towards the January 2015 lows of 1.65% -- especially if Friday's jobs report is underwhelming.

That point is worth noting too. Low bond yields usually go in hand in hand with weak economic data. So it's a bit disconcerting that the 10-year Treasury rate is this low. It could be a bad omen.

But barring an actual recession, Valeri said U.S. rates should bounce back eventually. And he thinks they are likely to remain significantly higher than other developed markets.

So while many have been predicting that the Treasury market is a bubble waiting to burst for a long time, the more than 30-year old bull market for bonds may not be over just yet.

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