It’s been an interesting month for Treasuries – just read the reports, all over the Web, about the end of the Treasury bull market, the coming Treasury bear market, steeply rising interest rates, and on and on. But if you were an investor in TIPS, you would have seen maybe a blip in your holdings. The fact is, very little has changed.

Tomorrow (March 22) the Treasury will auction a reissue of a 10-year Treasury Inflation-Protected Security, CUSIP 912828SA9, that was first issued on Jan. 19, with a coupon rate of of 0.125%, but it auctioned at -0.046%, the lowest rate ever for a 10-year TIPS.

Tomorrow’s auction is going to threaten that lowest-ever record. Here is the current value of CUSIP 912828SA9, at the close of today’s market:

So, to recap … Treasuries are in a bear market. However, this TIPS, which was issued three months ago, has gone up in value about 2% and pays a yield of -0.109%, lower than the issued yield of -0.046% three months ago.

Some bear market.

TIPS are not yet in a bear market. As Treasuries slumped last week, TIPS did take a hit, but it appeared some investors were leaping from traditional Treasuries into TIPS to take advantage of the inflation protection. That explains the rise in breakeven rate, which today settled in at 2.41%. (Here’s why that is important.)

I consider Thursday’s auction to be unattractive, especially if it goes off at a record-low base yield. Right now, that looks very likely. I should mention that predicting TIPS yields is very difficult, and I am lousy at it. I’d expect this auction to be a bit better than the current yield, maybe something along the lines of -0.08%? My guess is based on the fact that recent auctions have been coming in with better-than-market rates.

I have to ask: Who is buying this? Treasuries are under fire, and yet buyers want to take a TIPS issue at an all-time low yield?

For the record, here are all the 10-year TIPS issues and reissues from recent years. Check out that yield column. The time to buy is not yet here, just my opinion.