The U.S. Treasury yield curve reached its steepest point in over a year Thursday amid an improving growth outlook that’s boosted investors’ inflation expectations in recent weeks.

The 2- to 10-year spread peaked at 31 basis points Thursday, its widest level since October 2018, before retreating as Treasuries rebounded on the day. The initial sell-off came in the wake of global declines in sovereign debt that started in European hours.

The steepening extends the sharp reversal of the haven trade in August that drove the curve into inversion, a phenomenon that’s been a reliable indicator of impending recession. That market move was driven by deepening pessimism over the global outlook amid rising trade tensions and a string of weak manufacturing data.

In the last few months, Federal Reserve policy easing and signs of improving economic figures have helped turn around investor sentiment. Market-based measures of U.S. inflation expectations are close to the highest since July.

“It’s a reflection of faith in the Fed that their 75 basis points of cuts will be sufficient to restoke inflation, at least to a degree,” said Ben Jeffery, a strategist at BMO Capital Markets.

A big catalyst for Thursday’s steepener trade came from a large block sale in Treasury futures betting on a steeper incline for both the 2- to 10-year and the 5- to 30-year parts of the curve. That latter portion has risen above 63 basis points, up 8 basis points over the past week.