(Bloomberg) -- Bond investors are driving a wedge into the Treasury market in anticipation of slower economic growth and faster inflation, spurring demand for shorter-term Treasuries at ever-lower yields while longer-term yields drift higher. The next test comes with Friday data expected to show inflation remains elevated.

Five-year yields fell eight basis points last week, breaching 4% after Federal Reserve policymakers lowered their forecasts for US economic growth, bolstering wagers on interest-rate cuts this year. As 30-year bond yields climbed on Friday, they exceeded five-year yields by nearly 60 basis points, the widest margin since September.

A highlight of this week’s busy economic data calendar is personal income and spending data for February, on Friday. The report includes the inflation gauge the Fed aims to have average 2% over the long run. It was 2.5% in January and economists expect it to remain there, while the core rate excluding food and energy is seen accelerating to 2.7% from 2.6%.

This week also brings the last Treasury coupon auctions of the month — a combined $183 billion of new two-, five- and seven-year notes.

What to Watch