LONDON (Reuters) – After almost three years of successfully predicting a global economic revival, world bond markets are furiously flagging the risk of yet another recession, as well as low inflation for a generation. Spooked by the escalating U.S.-China trade war, long-term interest rates embedded in government bond markets – widely seen as the most accurate predictors of future economic activity and inflation – have relapsed into deep troughs. U.S. Treasury yields have plunged 50 basis points in seven weeks, while sub-zero German 10-year bond yields are at record lows. In Japan, Britain, Switzerland and France, borrowing costs are at their lowest since 2016 – when financial markets were hit by a combination of blows including Britain’s shock decision to leave the European Union and an economic slowdown in China. Recession is not a given. Bond markets may be pointing that way but some other indicators, such as equity markets, are not as bearish. However trade tensions, also including a recent U.S. plan to impose tariffs on Mexico, may be what’s making the present slide in bond yields different. “We have to pay attention,” said Franck Dixmier, global head...