By Akane Otani 

Investors will get another look at the health of the economy this week when the government releases its first estimate for third-quarter gross domestic product, followed by personal-consumption expenditures on Oct. 29. Unexpectedly strong readings could send Treasury yields on a fresh run higher, although recent data have suggested that, even with the economy growing at a healthy clip, inflation pressures remain muted.

U.S. government bond yields broke out to multiyear highs in October, supported by a string of strong economic data:

Meanwhile, bets have stacked up among traders that the Fed will keep tightening monetary policy with its rate-increase campaign:

Yet even as bond yields have risen, inflation expectations have remained subdued. The price of funds offering bond investors protection against inflation has fallen:

Some analysts say that reflects bets that inflation, while on the rise, isn't in danger of spiking soon:

That could help fuel further gains for bond proxies, which have outperformed broader stock indexes in October:

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

October 21, 2018 11:14 ET (15:14 GMT)

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