The U.S. sale of $15 billion of 10-year inflation-indexed debt drew the lowest yield in more than a year amid bets consumer-price growth will increase beyond the Federal Reserve’s 2 percent target as the economy improves.

The Treasury Inflation Protected Securities yielded 0.249 percent, the least since May 2013. Direct bidders, an investor category that includes pension funds and insurers, bought 10.3 percent of the notes, the most since November, exceeding their average 9.2 percent share at the past 10 auctions.

“There’s still pretty solid demand for inflation protection,” said Stanley Sun, a New York-based strategist at Nomura Holdings Inc., which as one of the Fed’s 22 primary dealers is required to bid in U.S. debt sales. “People are still wanting inflation protection for the long term.”

The U.S. sold $13 billion in 10-year TIPS at the last auction of the securities, on May 22, drawing a yield of 0.339 percent.

Inflation-indexed notes pay interest at lower rates than nominal Treasuries on a principal amount that’s linked to the Labor Department’s consumer price index.

Benchmark Treasury 10-year note yields increased four basis points, or 0.04 percentage point, to 2.51 percent in trading in New York.

At today’s sale, indirect bidders, a category of investors that includes foreign central banks, purchased 53.1 percent of the debt, versus the 53.3 percent average at the past 10 offerings.

The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.49, compared with a 10-sale average of 2.56.

ETF Buying

Investors are stepping up their buying of exchange-traded funds that hold Treasuries tied to cost-of-living increases, data compiled by Bloomberg show. Net purchases of the 12 ETFs that hold U.S. inflation-linked bonds in July have totaled $193 million, more than triple the $60 million that has flowed into conventional government bonds this month.