I almost never give any color on a U.S. government's Treasury Inflation-Protected Securities auction, but today I am.

The U.S Treasury just auctioned off 10-year TIPS, and the demand was robust. The yield of 0.548% was well below the when-issued rate of 0.575%.

The auction also saw the best bid-to-cover since May 2014 at 2.69%. That level compares with last year's 2.33% average. Also of note, direct and indirect bidders took 89% of the auction -- the most on record dating back to 2003.

In other words, protection from inflation was in high demand at Thursday's auction. Implied inflation expectations have now broken out to the upside -- and at 2.09%, expectations are at their highest level since September 2014.

Whether it's wage fears or the rise in commodities prices, the market's inflation views are shifting. I repeat my belief that higher cyclical inflation is a large under-appreciated risk for 2018.

The Federal Open Market Committee meets in two weeks, and I have to wonder whether this line -- which was in every single statement in 2017 -- will remain: "Market-based measures of inflation compensation remain low." Or, will the FOMC instead say that inflation is finally back to the central bank's 2% target?

Here's a look at the 10-year inflation breakeven chart:

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.