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The U.S. Treasury yield curve hit its flattest level in more than 12 years on Tuesday, suggesting increased market anxiety over the state of the economy amid trade war concerns and global political tensions.

The spread between U.S. 2-year and 10-year note yields, a closely watched metric for recession signals, declined to 0.6 basis point, the narrowest since June 2007, according to Refinitiv data. The last time this yield curve inverted was also in June 2007 in the midst of the U.S. sub-prime mortgage crisis.

“I wouldn’t say an inversion is convincing a recession signal as we have received in previous cycles and decades because there’s so much central bank manipulation of the yield curve,” said John Hermann, rates strategist, at MUFG Securities in New York.

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“The fact that the yield curve was so flat and could possibly invert means that the U.S. economy is growing at or below trend, the risks are to the downside, and that the inflation mandate won’t be achieved,” he said.

Despite weak signals from the yield curve, U.S. yields rose across the board on Tuesday after the Trump administration delayed imposing a 10% import tariff on laptops, cellphones, video game consoles and a wide range of other products made in China. Analysts said the U.S. move served to ease trade tensions between the two world’s largest economies, at least for now.

U.S. two-year and 10-year note yields hit session highs after the trade news, while those on 30-year bonds rallied from more than three-year lows. Traders earlier were bracing for 30-year yields sinking to a record low below 2.08%.

The U.S. tariffs had been scheduled to start next month. The U.S. Trade Representative’s Office action was published just minutes after China’s Ministry of Commerce said Vice Premier Liu had a phone conversation with U.S. trade officials.

“It’s overall trade optimism for global markets,” said Justin Lederer, Treasury trader at Cantor Fitzgerald in New York.

That said, market sentiment remained cautious overall.

Tuesday’s data showing a pickup in U.S. inflation in July earlier pushed yields slightly higher. Analysts said the higher inflation was a positive sign for the U.S. economy, but was likely not enough to deter the Federal Reserve from cutting interest rates at the next policy meeting in September.

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The Labor Department said the U.S. consumer price index climbed 0.3% last month, lifted by gains in the cost of energy products and a range of other goods. Excluding the volatile food and energy components, the CPI gained 0.3% after rising by the same margin in June.

“I really think we need to see a string of stronger inflation data before we see a mutual change in sentiment,” said Bill Merz, director of fixed income at U.S. Bank Wealth Management in Minneapolis.

In afternoon trading, U.S. benchmark 10-year Treasury note yields rose to 1.681% from 1.64% late on Monday.

Yields on 30-year bonds advanced to 2.14% from 2.13% on Monday. Thirty-year yields earlier hit 2.097%, their lowest level since July 2016.

At the short end of the curve, U.S. two-year yields rose to 1.666% from Monday’s 1.58%.

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