New Delhi, July 3 -- At the European Central Bank gathering, new Federal Reserve Chairman Kevin Warsh pointed to a wave of positive market reactions as proof that investors get his vision.

But Warsh failed to mention one part of the bond market that has been acting wonky lately: the yield curve, which graphs the amount by which longer-dated Treasury yields exceed shorter-dated ones.

It is narrowing toward a point where it typically signals an economic downturn might be ahead. Warsh's silence on the indicator doesn't mean he doesn't see it; he may have simply chosen not to mention it. But it deserves investors' attention.

From the get-go, Warsh has made it clear: There will now be less signaling about the future from the Fed, a shift th...