The decline in inflation has driven the 10-year breakeven rate, the difference in yields between 10-year Treasury Inflation Protected Securities and comparable U.S. notes, to 0.13 percentage point, near the narrowest since the government started selling TIPS in 1997.
“The near-term deflationary forces are here in the numbers, and it will remain that way for the next several months,” said Kevin Flanagan, a Purchase, New York-based fixed- income strategist for Morgan Stanley’s individual-investor clients. “From an inflation standpoint, the kind of numbers we are seeing will not take us to levels outside of the realm of where we are now.”
Several months is a heck of a lot different than 10 or even 30 years. While I feel TIPS aren't cheap, next to Treasuries they look like bargains.