"If so I wonder why? What causes a situation like this? Why have US bond yields been dropping?"
Because the economy is slowing. A slowing economy requires stimulus, ie lower rates. Bond investors are smarter than equity investors. Equity investors have been led to believe that the economy is recovering, that the employment situation is improving. But the employment numbers are being massaged by Obamacare. Basically if you don't swap your full time workers for twice as many part time workers you pay a high price in the form of Obamacare. But few equity investors read enough to know what is really going on. Stocks are just plain wrong.
