U.S. inflation-protected securities lagged behind conventional Treasuries by the most in 14 months before a government report today economists said will show costs in the economy are in check.

Investors in Treasury Inflation Protected Securities have lost 0.7 percent this month, equivalent to a 12 percent decline at an annual rate, according to Bank of America Merrill Lynch indexes. So-called nominal securities are delivering a 1 percent annualized decline. It was the steepest underperformance for TIPS since December 2011. The U.S. is scheduled to sell $9 billion of 30-year TIPS today.

“Inflation’s not worrisome,” said Kei Katayama, who buys non-yen debt in Tokyo for Daiwa SB Investments Ltd., which manages the equivalent of $53 billion and is a unit of Japan’s second-largest brokerage. “It may increase eventually, but the current mix of slow growth and relatively high unemployment means there’s not much pressure for inflation.”

U.S. 10-year rates were little changed today at 2.01 percent as of 1:07 p.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 2 percent security due in February 2023 was 99 30/32.

Japan’s 10-year rate was little changed at 0.735 percent. The nation’s sovereign debt market has gained 0.2 percent this month, or 3.8 percent annualized, the Bank of America data show.

U.S. Inflation

U.S. consumer costs probably rose 0.1 percent in January from the month before, after being unchanged in December, according to a Bloomberg News survey of economists before the Labor Department report at 8:30 a.m. in Washington.

Prices excluding food and energy climbed 0.2 percent, following a 0.1 percent increase, based on economists’ responses.

Annual inflation slowed to 1.6 percent from 1.7 percent, the survey shows. The figure was as high as 14.8 percent in 1980.

Sales of previously owned U.S. homes eased in January, and a measure of the economic outlook for three to six months climbed, reports today will show, based on the economists’ forecasts.

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