Inflows into inflation-indexed exchange-traded bond funds this year have already exceeded flows for all of 2015, suggesting investors are growing more bullish that inflation will climb toward the Federal Reserve’s 2 percent target.

Investors plunked $2.8 billion into U.S. ETFs holding government securities that protect against rising consumer prices as of April 19, according to data compiled by Bloomberg. That compares with $2.6 billion in all of 2015. A bond-market gauge of the expected pace of price increases over the next decade rose for a third day as oil prices surged to the highest since November.

Sales of inflation-index funds totaled only $671 million in the second half of 2015 as confidence faded that central banks could spur price gains amid a plunge in commodities and a slowdown in global growth. This year, oil has rebounded and fears of a U.S. recession have subsided as the Fed indicated it will be less aggressive in its approach to policy. Fed officials last month cut their forecasts for interest-rate increases in 2016 to two from four, saying global economic and financial developments continue to pose risks.

The Fed "has signaled a slow-growing economy, but under the surface we’re starting to see some initial inflationary pressure," Lisa Emsbo-Mattingly, who leads the asset-allocation research team at Fidelity Investments, which oversees $2 trillion in assets, wrote in an April 15 note to clients. "At this point, I would worry more about protecting against inflation than against negative growth."

Inflation Fear

The yield on the benchmark Treasury 10-year note rose by the most in almost two months, climbing six basis points, or 0.06 percentage point, to 1.84 percent as of 4:28 p.m in New York. The price of the 1.625 percent note maturing in February 2026 was 98 1/32.

The gap between yields on U.S. 10-year notes and equivalent Treasury Inflation-Protected Securities, known as the 10-year break-even rate, rose one basis point to 1.63 percentage points. It fell to 1.2 percentage points in February, the lowest since 2009. The price of crude oil rose for a second day and has climbed more than 60 percent from a 12-year low in February.

“The fear of inflation is coming back into the market -- you see that with the pick-up in TIPS break-evens,” said Larry Milstein, managing director of government-debt trading at R.W. Pressprich & Co. in New York. “That’s why we’re seeing Treasury yields moving higher."

TIPS Auction

Inflation-indexed securities have  advanced 4.5 percent this year, compared with a 3.5 percent gain for the broader Treasury market, according to Bank of America Merrill Lynch index data.

Demand for TIPS will be tested Thursday at a $16 billion sale of the debt, which offers a face value that rises and falls according to a gauge of consumer-price increases.

The core consumer-price index rose at a 2.2 percent annual rate in March, according to a Labor Department report April 14. The Fed’s preferred inflation gauge, the personal consumption expenditures index, fell to a 1 percent annual pace in February.

“Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but 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 further,” the Federal Open Market Committee wrote in its March policy statement.