Dumping TIPS in favor of Treasuries (which would be selling breakevens) is the theoretically correct move if your expectations of inflation have declined; in theory, real yields should be roughly unchanged and nominal bonds should improve so that the spread tightens. No, real yields rose because the knee-jerk response to the inflation data was to dump TIPS. But investors can't help but think of TIPS as having inflation "protection," when a more-accurate statement would be that TIPS are merely neutral on inflation and shouldn't react to changes in inflation expectations.