The main measure of the yield curve briefly deepened its inversion on Tuesday — with the yield on the 10-year Treasury note extending its drop below the yield on the 2-year note — underlining investor worries over a potential recession.

But while inversions are seen as a reliable indicator of an economic downturn, investors may be pushing the panic button prematurely. Here’s a look at what happened and what it might mean for financial markets.

The yield curve is a line plotting out yields across maturities. Typically, it slopes upward, with investors demanding more compensation to hold a note or bond for a longer period given the risk of inflation and other uncertainties.

An inverted curve can be a source of concern for a variety of reasons: short-term rates could be running high because overly tight monetary policy is slowing the economy, or it could be that investor worries about future economic growth are stoking demand for safe, long-term Treasurys, pushing down long-term rates, note economists at the San Francisco Fed, who have led research into the relationship between the curve and the economy.

They noted in an August 2018 research paper that, historically, the causation “may have well gone both ways” and that “great caution is therefore warranted in interpreting the predictive evidence.”

What just happened?

The yield curve has been flattening for some time. A global bond rally in the wake of rising trade tensions pulled down yields for long-term bonds. The 10-year Treasury note yield TMUBMUSD10Y, 0.657% fell as low as 1.453% on Wednesday, trading around 4 basis points below the yield on the 2-year note peer TMUBMUSD02Y, 0.136% .

The inversion on this widely-watched measure of the yield curve’s slope had already taken place two weeks ago, when signs of economic weakness across the globe drew investors into haven

See: 2-year/10-year Treasury yield curve inverts, triggering bond-market recession indicator

Why does it matter?

The 2-year/10-year version of the yield curve has preceded each of the past seven recessions, including the most recent slowdown between 2007 and 2009.

Other yield curve measures have already inverted, including the widely-watched 3-month/10-year spread used by the Federal Reserve to gauge recession probabilities.

Is recession imminent?

A recession isn’t a certainty. Some economists have argued that the aftermath of quantitative easing measures that saw global central banks snap up government bonds and drive down longer term yields may have robbed inversions of their reliability as a predictor. According to this school of thought, negative bond yields in Europe and Japan have forced yield-starved investors to the U.S., artificially depressing long-term Treasury yields.

Read:Fed not on red alert after yield-curve inversion

Some Fed policy makers, including New York Fed President John Williams, have also periodically questioned the overwhelming importance placed by market participants on the yield curve, seeing it as only one measure among many that could point to economic distress.

Also see:Here are 3 times the Fed denied the yield curve’s recession warnings, and was wrong

Others say an inversion of the yield curve reflects when the bond-market is expecting the U.S. central bank to set off on an extended easing cycle. This pent-up anticipation drives long-term bond yields below their short-term peers. But if the Fed cuts rates in a speedy fashion and successfully prevents an economic downturn, the yield curve’s inversion this time around may turn out to be a false positive.

Take note: Wall Street bets on a 50-basis-point Fed cut jump as yield curve inverts, stocks sink

And even if the yield curve does point to a future recession, investors might not want to panic immediately. From 1956, past recessions have started on average around 15 months after an inversion of the 2-year/10-year spread occurred, according to Bank of America Merrill Lynch.

Read: The U.S. Treasury 2-10 year yield curve inverted and that means stocks are on ‘borrowed time,’ says BAML

Are market worries overdone?

Some investors argued that until other recession indicators, such as the unemployment rate, start blinking red, it’s probably premature to press the panic button.

“It’s a recession indicator among many others, though the yield curve may be flashing red, others are not,” said Adrian Helfert, director of multi-asset portfolios at Westwood Holdings Group, in an interview with MarketWatch.