Treasury Inflation Protected Securities are beating nominal U.S. debt this year in a sign investors want insurance against rising costs as oil prices recover.

TIPS have returned 6.9 percent in 2016, versus 5.5 percent for conventional Treasuries, based on Bank of America Corp. data. The figures put inflation bonds on course to beat nominal debt this year for the first time since 2012. Consumer-price gains are running at about half the Federal Reserve’s 2 percent goal, and they’ve been below the objective for two years, though costs excluding food and energy are exceeding the target.

“Oil prices are recovering,” said Hideaki Kuriki, a debt investor at Sumitomo Mitsui Trust Asset Management in Tokyo, which oversees $80.9 billion. “That will add to inflation pressure. Treasury yields will go up a little in the short term. But in the American economy, demand is not strong. Inflation pressure is limited.”

The U.S. 10-year note erased earlier gains, with yields little changed at 1.56 percent as of 9:35 a.m. in New York, according to Bloomberg Bond Trader data. The 1.5 percent security due in August 2026 was at 99 14/32.

Two-year note yields rose two basis points, or 0.02 percentage point, to 0.75 percent after Federal Reserve Bank of New York President William Dudley said the U.S. is "edging closer" to the point where an interest-rate hike will be appropriate.

The U.S. cost of living was little changed in July. It was the first time in five months the consumer-price index failed to advance, Labor Department figures showed Tuesday. Excluding food and energy, prices rose 0.1 percent, less than projected.

Crude oil futures contracts have risen more than 20 percent in 2016, after slumping 30 percent in 2015 and 46 percent in 2014.

The difference between yields on 10-year notes and same-maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, was 1.44 percentage points. The average for the past five years is 2 percentage points.

The Fed repeated in its latest statement last month that it expects the inflation rate to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens.

“Oil prices are recovering,” said Toshifumi Sugimoto, chief investment officer in Tokyo at Capital Asset Management. “We’ll see TIPS go higher, but it’s limited. Global economic growth is very slow, in the developed countries in particular. We will still see a low- inflation environment.”